Welcome to another Crypto Weekly Digest brought to you by VirtualBacon.
This week, we're diving into the top five cryptos that I believe it's time to part ways with. Yes, even as we witness a wave of short-term euphoria sweeping the market, it's crucial to differentiate from the gems. There are plenty of sectors brimming with growth potential, but let's face it - some are just riding the hype wave, appearing more dazzling than they really are. The cryptos we'll explore today aren't your run-of-the-mill flops or shady scams. These are big names, established players in the game. But here's the catch – either their current market value doesn't quite match their real-world adoption, or there's a dark horse in their sector, less known but with a potential that's hard to ignore. So, let's get right into it and sift the overvalued from the undervalued.
Binance Coin ($BNB)
$BNB tops my list of cryptos to sell. Binance's recent legal woes, including a $4.3 billion DOJ fine and CEO CZ stepping down amidst money laundering charges, have sparked major concerns. This settlement ushers in a stringent surveillance program by US regulators, requiring Binance to report all US-related transactions. This is significant, considering the US's vast crypto user base and the potential market growth from Wall Street's adoption and spot ETFs.
Binance's market dominance in spot trading is waning, from a peak of 63.75% to just 36%. While BNB might stay in the top 10, its massive $37 billion valuation seems disproportionate compared to rising competitors like OKX's OKB. These emerging exchanges are quickly capturing market share, making BNB less attractive. Given these dynamics, BNB is my choice for a timely exit from the portfolio.
Cosmos Hub ($ATOM)
Cosmos Hub's ATOM token is my second pick for selling. While Cosmos' technology is commendable, especially its Inter-Blockchain Communication Protocol (IBC), ATOM as an investment doesn't match up. The widespread adoption of IBC hasn't boosted ATOM's value, primarily due to Cosmos functioning more as a public technology project without strong leadership driving its token's growth.
The ATOM 2.0 tokenomics upgrade didn't generate the anticipated excitement, and the interchange security program, though promising, hasn't seen significant adoption yet. However, the emergence of Neutron, a consumer-focused chain supporting smart contracts, might change the game. Neutron addresses the Cosmos Hub's limitations by enabling defi interactions and is backed by key players in the Cosmos ecosystem.
With Cosmos Hub valued at $3.3 billion and Neutron at $1.17 billion, I foresee Neutron overtaking Cosmos in this cycle. Its smart contract capability and IBC adoption make it a more attractive investment, leading me to suggest pivoting from ATOM to Neutron.
Solana Airdrops ($PYTH, $JTO)
The third category I'm looking to sell is the hyped airdrop tokens on Solana, specifically $PYTH, $JITO, and $JUPITER. While Solana's resurgence has brought these tokens into the limelight, their valuations seem inflated.
Starting with PYTH Network, it's an Oracle provider similar to Chainlink but lags significantly in terms of adoption and total value secured. Despite being a decent project, PYTH's valuation seems excessive compared to its market performance.
Then there's JITO, a liquid staking protocol on Solana. While its total value locked is impressive, its valuation far exceeds that of similar projects with even more adoption, indicating an overestimation of its market position.
Lastly, JUPITER, a decentralized exchange aggregator, boasts substantial trading volume but is anticipated to launch at a valuation surpassing established platforms like Uniswap. This overvaluation doesn't align with its current market standing, especially considering it only supports Solana.
In conclusion, despite the potential of these projects, their current inflated valuations make them a risky hold. It's wiser to explore other tokens in their respective sectors that offer better long-term potential.
$TIA, is my fourth pick for selling. Despite being bullish on Celestia's long-term potential, the current hype has inflated TIA's short-term value. Celestia, a part of the Cosmos ecosystem, innovatively separates data and consensus layers from execution, allowing flexibility in blockchain stacks and programming languages. Its mobile light node functionality is groundbreaking, enabling network participation via smartphones.
However, the recent price surge from around $2 to $14, a nearly 6X increase, seems to outpace its technological adoption. With 20% of the total supply distributed in a substantial airdrop, there's a potential for market dumping as recipients claim and possibly sell their $600 million worth of tokens.
Moreover, Celestia's token unlock in November 2024 could lead to market volatility. This pattern resembles other airdrop projects like Arbitrum, where initial hype is followed by a price correction before a potential second wave of growth. For traders, the strategy might involve waiting for a price cool-off in the coming months before the next hype cycle. Long-term investors might consider averaging their entry in mid-2024 and buying more post-unlock.
At a current valuation of $13 billion, TIA appears overvalued. Now seems an opportune moment for profit-taking, with plans to re-enter at more favorable prices in 2024.
BRC-20 Memecoins ($SATS, $RATS)
The final category I'd sell right now is BRC-20 Memecoins. Despite the buzz around these tokens, their overvaluation is evident, lacking substantial utility. Take $SATS, which, despite a massive valuation of $1.5 billion, offers little beyond homage to Satoshi. Similarly, $RATS, valued at $300 million, lacks even a website. This overhype is largely fueled by the novelty of BRC-2 tokens and Bitcoin ordinals. These early-stage tokens mimic the ICO craze on Ethereum, attracting inexperienced investors, especially in China.
However, they’re fundamentally underdeveloped compared to mature ERC-20 tokens, lacking DeFi functionalities like staking or trading. While the technology enabling BRC-2 tokens is intriguing, the current popular tokens are essentially meme coins. Instead, the real potential lies in the infrastructure being developed around BRC-2, such as wallets, bridges, and DeFi protocols. I’m bullish on this technology but would recommend selling overhyped meme coins and focusing on projects with genuine utility in the Bitcoin ecosystem.
Altcoin Market and Project Updates
Now, let's check out the major altcoin gainers and losers from the past week, and catch up on key project updates.
Best Performing Coins of The Week
Worst Performing Coins of The Week
🟠 Yield Guild Games ($YGG) jumps 20% after announcing a partnership with Ubisoft for the Web3 game 'Champions Tactics,' boosting investor interest.
That concludes this week’s newsletter, where we delved into the top five cryptocurrencies I recommend selling. Each one, from Binance Coin to BRC-20 Memecoins, was carefully analyzed to showcase why they currently appear overvalued. Alternative picks with higher potential and lesser-known profiles were also highlighted, offering a broader perspective on the crypto landscape. I'm eager to hear your thoughts — do you agree with these assessments, or do you have a different viewpoint on these tokens? If you believe there are other overvalued projects I may have missed, please share your insights. Your feedback is invaluable as we navigate this dynamic and ever-evolving crypto market.
5 Cryptos I'm SELLING in 2024
3 Guaranteed Crypto Airdrops for Passive Income in 2024
What is Mantle Crypto $MNT? | Jordi Alexander Interview
Thanks for reading! If you enjoyed this newsletter, please share it with your friends.
I have set up a VirtualBacon copy-trading account on Fairdesk, BingX and CoinW that you can use to follow all my trades.
If you sign up with my link, you can get a special signup bonus of upto $100,000 USD based on how much you deposit.