3 Penny Cryptocurrencies to Dump Before They Tank

2022 was an incredibly challenging year for financial markets. It was brutal for those looking to dabble into the traditionally riskier asset classes, such as cryptocurrencies. Though Bitcoin (BTC-USD) has been building a nice head of steam, the market overall remains remarkably volatile. Therefore, it’s important to consider penny cryptos to sell.

I say penny cryptos because most top cryptocurrencies are down double-digit and, in some cases, triple-digit margins last year. That said, there were a few cryptos, especially the ones discussed in the article, which deserved a shellacking. Moreover, multiple bankruptcies hit the crypto sphere, with big players like Three Arrows Capital, BlockFi, and FTX facing the heat. Hence, the sector is far from getting out of the woods yet.

Penny Cryptos to Sell: Shiba Inu (SHIB)

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Shiba Inu (SHIB-USD) is the feisty underdog in the crypto sphere, gaining popularity over the years for its adorable dog-themed branding and its army of supporters called the Shib Army. The crypto made headlines back in 2021 when its price skyrocketed to the moon, gaining an unbelievable 45,000,000%. However, since reaching highs of $0.00008616, SHIB is down more than 87%.

Though the macro-environment has plenty to do with SHIB’s precipitous drop, its inherent flaws are more pertinent. Shiba Inu is essentially a payment token running on the Ethereum network, and investors can earn passive income through staking. That doesn’t give Shiba any competitive edge over its peers.

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Most recently, it launched its Shibarium application which effectively allows the form to avoid high costs and congestion on the Ethereum network. However, the result is that Ethereum whales have started offloading trillions of Shiba Inu tokens. Additionally, with a limited token supply already, expect SHIB to tank further.

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Dogecoin (DOGE)

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Dogecoin (DOGE-USD) investors caught lightning in a bottle during the pandemic when its price skyrocketed over 10,000%. However, like other meme tokens, it has lost a truckload of value. It remains a fundamentally flawed investment, with few use cases and an ever-increasing supply that puts downward pressure on its price.

It doesn’t have a capped supply like other cryptos. For instance, Bitcoin has a limited supply of 21 million, and its value is driven by its scarcity, unlike Dogecoin. Close to 5 billion of DOGE is added yearly, pushing down prices regardless of demand. Moreover, the adverse conditions are unlikely to result in a spike in price. It might take much more than just Dogefather Elon Musk’s tweet to lift its price.

The Sandbox (SAND)

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Another penny cryptocurrency you should consider selling is The Sandbox (SAND-USD). Once a high-flier, the blockchain-based metaverse player saw its value nosedive over 93% last year. There was a time in late 2021 when it was selling online real estate worth millions on its platform. Moreover, it crossed a whopping two million users in March last year.

However, as we saw with Meta Platforms (NASDAQ:META), perhaps the biggest needle-mover of the metaverse, the market will take time to become the juggernaut it’s touted to become. In fact, in its most recent quarterly earnings call, it seemed that the company is now focusing on more viable technologies, such as artificial intelligence, putting the metaverse plan on the back burner.

Hence, it leaves The Sandbox in a precarious situation as it navigates the current macro-environment. Recently, DappRadar has shown unique active wallets of less than 300 a day, which should caution investors to invest in the SAND token.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.