Despite the current decline in the market, cryptocurrencies have been one of the best performing asset classes in history. Accordingly, the market has yielded more than 550 percent in the last 5 years, compared to a meager 45 percent of the S&P 500. However, this does not mean that every digital currency is a good bet. An investment in Shiba Inu (SHIB) and Terra Classic (LUNC) could crash your portfolio, according to giant consulting firm Motley Fool.
“Terra Classic (LUNC) is an altcoin you should stay away from”
Terra Classic is the new version of the Terra stablecoin platform that crashed spectacularly earlier this year. The entity is now trying to reinvent itself after the great crash. But investors shouldn’t take that bait, according to the Motley Fool. According to the firm, Terra’s future looks as bad as its past. As we reported as Kriptokoin.com, Terra wiped out billions of dollars from the market in its May collapse. Currently, the project has a shattered reputation and a founder who is still on trial.
In fact, Terra Classic says the platform is independent of former Terra founder Do Kwon, who is currently on trial. The new developers of the platform consist of a group called Terra Rebels. This group claims that Do Kwon was not involved in the decision-making process of the new project. But Kwon’s negative influence will be hard to shake. In September, South Korea issued an arrest warrant for Do Kwon in connection with the TerraUSD explosion. After this news, Terra Classic fell by 25% in one day.
“SHIB will never explode like in 2021”
Shiba Inu, which was founded in 2020 to capitalize on the hype about Elon Musk, has attracted attention with a return of about 60,000,000% at the end of 2021. Indeed, SHIB was one of the best debuting cryptocurrencies in recent history. However, such a performance seems unlikely to happen again. The tightening global economic conditions and the nature of the meme token are fueling negative sentiment for the asset. When capital is scarce, investors are less interested in risky assets.
While these challenges affect the entire cryptocurrency market, highly volatile assets like SHIB are more vulnerable. Meme coins are fueled by hype rather than fundamentals like speed or transaction capacity. SHIB is trying to get out of this situation with new projects like Shibaverse, a metaverse venture. However, Metaverse has not started yet. At the end of the day, Shiba Inu looks like it will be one of the hundreds of meme tokens that do not bring any innovation to Blockchain technology. At this point, SHIB is a difficult asset to generate a return on investment.
“These are just two bad bets”
As the cryptocurrency market as a whole struggles, some assets like LUNC and SHIB have a particularly difficult road ahead. Despite past success, regulatory overhangs and poor competitive potential are likely to cause these assets to underperform their peers. Regardless, investors should think twice before investing their money in them.
31560
