The global cryptocurrency market has long been inspired by the fortunes of Bitcoin, and with good reason. Its dominance is such that when the price of Bitcoin falls, other cryptocurrencies have to bear the brunt.
But Bitcoin is not the only crypto. Some may be good investments, while others might be better to avoid. According to financial experts, here are four crypto investments you may want to avoid right now, followed by some that pose less risk.
Dogecoin (DOGE)
Vince Stanzione, founder and CEO of First Information and author of “The Millionaire Dropout,” called Dogecoin a “meme that refuses to die.”
“It started as a joke,” he told GOBankingRates. “It has charm, a celebrity backer in Elon Musk and a dedicated community, but no real fundamentals. I’m still surprised it has a market cap of $24 billion. If it were a company, it would put it in the S&P 500.”
Stanzione said meme coins often benefit from a “short-term pump,” triggered by something as simple as a tweet from a billionaire. “But crashes are serious. DOGE is a gambling token, not an investment. Avoid it.”
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ChickenCoin (CHKN)
According to Chad Cummings, an attorney and certified public accountant (CPA) at Cummings & Cummings Law who previously worked in finance and tax, ChickenCoin qualifies as an “ultra illiquid micro-cap token” that could pose legal and financial problems in addition to financial risks.
“I see investors getting stuck with six-figure paper losses that they can’t certify for tax purposes because no reliable market data exists and issuers disappear,” he told GeoBankingRates.
Pepe (Pepe)
Another meme coined with “no utility, whale-driven price increases and no accountability,” Stanzione said.
,[PEPE] Launching in 2023 on pure internet promotion,” he explained. “It has no roadmap, no team, and no practical use – just viral momentum. It peaked at around $12 billion around this time last year and has since been cut in half. Expect another milestone by 2026.”
Shiba Inu (SHIB)
Like Dogecoin, Shiba Inu is a meme coin that exists “primarily” as a joke, Cummings said, adding that he would “never” invest money in them.
,[They] The focus is increasing on social media – not cash flow,” Cummings said. “When sentiment breaks, liquidity evaporates, spreads widen and retail holders get stranded while insiders move into thin markets.”
Which cryptos are worth watching?
Stanzione said he is “very negative” on the crypto sector for the next 12 to 24 months and expects “greater clarity,” so he doesn’t make any recommendations right now. If prices fall to a more reasonable level in the next few years, he could “get more bullish.”
Cummings is similarly cautious when it comes to investing money in cryptocurrencies. But if he had to recommend any crypto, he would choose the two largest cryptocurrencies in the world.
“Bitcoin and Ethereum are the only logical starting points for most investors,” he said. “I advise my clients to consider Bitcoin as a highly speculative alternative asset with transparent monetary policy and deep liquidity, and I see Ethereum as the critical infrastructure for many real projects.”
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This article was originally published on GOBankingRates.com: I’m a financial expert: 4 crypto investments I would never recommend – and 2 I would
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