3 High-Risk Cryptos You Should Avoid Like the Plague Right Now

Many crypto projects certainly have some degree of shadows. In the high-risk cryptocurrency space, there are a number of projects that investors can call “carpet pulls” or “full losses” that leave some investors sleepless.

Many meme projects and those that became famous in a short period of time have experienced sharp declines in the past. These are the types of cryptos that many investors who care at all about capital preservation may want to avoid.

The thing is, there are so many meme tokens to choose from and I won’t claim that all of them are heading to zero over time. But until certain projects provide real value to end users, it is difficult to see a reason to own many of these tokens.

Let’s look at three large cap meme projects that should be placed in the high-risk cryptocurrency category and are worth avoiding now.

Pepe (PEPE-USD)

Pepe (PEPE-USD) is among the top 25 cryptos by market cap at nearly $4 billion, which represents a high valuation. Despite a 23% correction last month, this token is still up 503% over the past year.

Therefore, many meme stock investors may continue to hold this digital asset given its past returns during this bull market cycle.

The fact is that Pepe’s unattractive token economics is one of the main reasons why investors should be wary of this token. Currently, this project has a total supply of more than 420 trillion. While whales continue to trade this token, most recent transactions have taken place outside of Pepe and into other large-cap tokens such as: ether (ETH-USD).

If this trend continues, a further decline can be expected as whale activity increases. With more than 1 trillion tokens deposited on centralized exchanges during a recent session, Pepe saw double-digit drops in a day. If this type of volatility continues, it could become the norm in the next bear market.

Shiba Inu (SHIB-USD)

Like meme coins Shiba Inu (SHIB USD) have clearly attracted large communities and are projects that have retained strong initial support. Of course, basing your investment decision on how much you like a particular dog meme isn’t necessarily a strategy chosen by most rational investors.

But it is clear that Shiba Inu has seen huge upside during times of market irrationality.

Recently, this token has fallen more than 50% from its previous peak this year as weakening technical fundamentals and slowing demand appear to have taken hold.

Other meme tokens are becoming more and more interesting to traders, whose focus tends to shift from one token to another. What is hot rises, what is not hot falls by the wayside.

With speculators having more and more options to choose from, Shiba Inu is one of the high-risk cryptos worth avoiding right now.

Ultimately, there is competition for speculative capital. In the crypto space, it appears that capital is unlimited, but retail investors who may be forced to withdraw their speculation to pay their bills may soon find negative momentum building.

If that’s the case, Shiba Inu could be at a significant disadvantage from here considering how far it’s already come.

Dogecoin (DOGE-USD)

Considered the grandfather of the meme token movement, Dogecoin (DOGE-USD) is another project that has experienced major price fluctuations despite its strong community. This token fell by 9% in the past week and traded below the 15 cents per token mark.

Despite having a market cap of over $15 billion, it is a project that could suffer the same fate as the two meme tokens mentioned above in a bear market environment.

Social media and celebrity influence greatly impact Dogecoin’s value, contributing to its speculative nature and occasional sharp declines. Unlimited supply and the lack of scarcity model present challenges to long-term investments.

Dogecoin peaked in May 2021, fueled by Elon Musk’s SNL appearance to synchronize it a “hustle” marked a downturn from which it never fully recovered.

Despite occasional signs of resurgence, Dogecoin struggled amid a new meme coin rally in 2024. While Dogecoin saw a 32% increase, competitors like Shiba Inu rose 60%, Pepe rose 692%, and Dogwifhat rose about 1,171% in market caps than $2 billion make them excellent alternatives for quick profits.

At the time of publication, Chris MacDonald did not hold, directly or indirectly, any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publication policies.

At the time of publication, the responsible publisher did not hold, directly or indirectly, any positions in the securities mentioned in this article.