Many cryptocurrencies have greatly appreciated in value in 2021. But a massive gain in value in a bull market also carries the risk that the value can quickly fall massively again if the expectations fall short. Let’s talk about 3 cryptos, with whom you should be particularly careful.
#1 Solana (SOL)
Solana was an extremely impressive phenomenon in the fall. The network impressed numerous investors with its high transaction speeds and excellent scalability. So Solana also depended on the original “Ethereum killer” Cardano. Even if the network crashed in mid-September, investors did not get discouraged.
However, in 2022, Solana could be one of the cryptocurrencies that do not live up to its hype and will lose a lot of its value. The hype about Solana was reminiscent of the same about IOTA at the end of 2017. IOTA also promised to turn the crypto market inside out with revolutionary blockchain technology. However, expectations did not meet there either. Solana is built on a lot of hype and the competition for Cardano and Avalanche never sleeps.
#2 Shiba Inu (SHIB)
Meme Coins are always cryptocurrencies that are particularly volatile. The insane price increases in recent months were based on numerous campaigns via social media influencers, support from powerhouses like Elon Musk, and a certain amount of independence for a dog meme.
Of course, like the Dogecoin, Shiba Inu now has a use and the DOGE example shows that meme coins can also stay at the top in the long term. Nevertheless, it is important to be very careful after such hype. A massive drop in Shiba’s price would not be uncommon in a bear market.
#3 Axie Infinity (AXS)
Axie Infinity is now played by millions of people around the world. Blockchain-based gaming and battling games are even considered a serious source of income for numerous people in developing countries. The extreme growth in the user base and the hype surrounding the metaverse made the value of the token skyrocket.
Cryptocurrencies that play a certain hype topic (decentralized gaming and NFTs) threaten to lose value again and again as the hype subsides. The sheer number of players (2.5 million in the last 30 days) speak against it. If trends change in the long term, there are more broadly adapted solutions on the market. A sharp drop in price in the next year is quite conceivable.