For over 100 years, the stock market has stood on a pedestal above all other investment vehicles. While it doesn't outperform bonds, housing, or other commodities every year, none of these other investment channels come close to matching the very long-term annualized performance of the market. scholarship.
But that does not prevent the cryptocurrencies to give the market a run for its money. For example, Bitcoin and Ethereum ( CRYPTO: ETH ) , the two largest digital currencies in market value, have increased by 8,640% and 28,970%, respectively, over the past five years. Meanwhile, the benchmark S&P 500 has "higher degree " of a more modest 104% during the same period.
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Cryptocurrency investors are excited about the potential of blockchain technology to revolutionize payments and maybe even improve otherss aspects of life, target as supply chains . For example, Ethereum's blockchain is at the heart of the success of Decentralized Finance (DeFi) - a finance-focused blockchain using smart contracts that will bypass traditional financial intermediaries who can slow down or deny transactions. Ethereum's blockchain could also be used to replace seemingly long paper trails associated with shipping goods around the world.
As another example, I kept an eye on developments with Stellar 's ( CRYPTO: XLM ) in the payment area . Stellar's blockchain has the ability to turn fiat currencies into Lumens (the coin used on Stellar's blockchain) and Lumens in fiat currency. It can efficiently transfer, validate and settle cross- payments in seconds , unlike the week long wait that some international payments can take.
But as a cryptocurrency skeptic, I am also fully aware that most blockchain and cryptocurrency projects fall somewhere between grossly overvalued and completely worthless. While the following three cryptocurrencies are exceptionally popular with investors, I suggest avoiding them like the plague.
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The first ultra-popular cryptocurrency to avoid is arguably the one with the largest support from the retail community: Dogecoin ( CRYPTO: DOGE ) .
" Hodlers "from Dogecoin firmly believe they are getting closer to the ground floor of large-scale adoption. They are also in love with the idea of billionaires Elon Musk and Mark Cuban bringing their love to them.utien b behind Dogecoin. But what these people don't see is that Dogecoin brings no competitive advantages to the table . In other words, it doesn't add value to the payments area with so many other better options available.
As an example I would cite performance and the underlying measures of Dogecoin. blockchain. The average Dogecoin transaction fee is around $ 0.55, which is significantly higher than at least a dozen other popular digital currencies. Besides being more expensive, Dogecoin's blockchain is not particularly fast at validating and settling transactions.
To add to the above, Dogecoin's network is not so popular, nor is it really capable of handling an influx of impoutgoing transactions. Over the past three months, its blockchain has only processed around 20,000 transactions per day, which is a three-year low. By comparison, Visa and Mastercard made 700 million transactions per day, on a combined basis, in 2018.
Want another reason to 'Avoid Dogecoin? How about its limited utility of the real world . Despite being described as 'the people's currency', Dogecoin is only accepted by 1,714 companies worldwide, according to the online business directory Cryptwerk - and it took eight years to reach that figure.
If investors take Elon Musk's tweets out of the equation, there is simply nothing in the sails of Dogecoin.
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Another digital currency to avoid like the plague is the fourth by market value: Binance Coin ( CRYPTO: BNB ) .
At some point , years ago, J was intrigued by Binance Coin . While it lacked utility outside of the Binance crypto exchange, it was one of a very small number of digital tokens that actually served a purpose. Investors / traders on the Binance platform could pay their fees with Binance Coin, rather than Bitcoin, and save up to 50% on their transaction fees. These savings would shrink after a few years.
The Binance team also bought back BNBs with trading profits, known as the burning coin. It is expected that 100 million Binance Coins may be burnt over time. Just as share buybacks can make every existing stock more valuable to shareholders, the Binance team seems to believe that reducing the total supply of available BNB coins can do the same for its stakeholders.
The problem for Binance Coin is that it faces a mountain of litigation. In May 2021, iIt was announced that Binance was under investigation by the Commodity Futures Trading Commission over concerns that it was allowing Americans to trade on its platform. Shortly thereafter, Binance was investigated in the United States for alleged money laundering and tax evasion, as well as possible insider trading. To boot, Binance faces class actions in the United States and Australia for disruptions to its crypto trading platform during times of heightened volatility.
Additionally, to stay in the theme, Binance Coin has very limited utility beyond its trading platform. Cryptwe rk notes that only 623 companies worldwide accept it as a payment method, as of October 2021. Even with its potential to capitalize on DeFi projects , there is noreason that this token has a market value of nearly $ 70 billion.
A Shiba Inu dog. Image source: Images.
The third and last cryptocurrency to avoid like the plague, Shiba Inu ( CRYPTO: SHIB ) , might just be the most dangerous on this list, and I don't mean that in a positive way.
Shiba Inu launched in the summer latest as a meme coin inspired by the Japanese dog breed Shiba Inu. Make no mistake, this piece is aimed at capitalize on the same community effect that skyrocketed Dogecoin earlier this year, and graft on the Shiba Inu theme to aid in this quest.
Plus, since the supply of Shiba Inu coins was 1 quadrillion tokens at launch, its price per coin is microscopic $ 0.00002614, at the time of writing. Just as some investors mistakenly believe that owning more shares of a penny stock will give them a greater chance of getting rich, Shiba Inu seems to be capitalizing on the misconception that owning more tokens of a crypto -nominal currencyThe cheap thing will give investors a chance to get rich quick.
The reality for Shiba Inu is that it is probably a pump and dump coin. According to data from the cryptocurrency trading platform and Coinbase ecosystem, the the average investor holding time is only six days . Given the potential for blank sale rules to come into effect, as well as the higher tax rates associated with short-term capital gains, trade Shiba Inu in the hope that Elon Musk tweets a photo of his dog doesn't seem worth the risk.
For starters, the actual use case of Shiba Inu is even more laughable than Dogecoin and Binance Coin. By putting into perspective the fact that this does notte that just over a year ago, only 43 companies in the world accept Shiba Inu as a method of payment, by Cryptwerk. Outside of a crypto exchange, Shiba Inu is effectively worthless.