Two major memcoins are predicted to die
The year 2022 may be the year of “purge” in the cryptocurrency markets and the last for memcoins, including the largest representatives of the class — Dogecoin and Shiba Inu. Some coins may not be able to withstand pressure from the U.S. Federal Reserve (Fed).
That’s what Bloomberg Senior Commodities Strategist Mike McGlone said in his January Bloomberg Intelligence: Crypto Outlook report. He writes that the speculative rise in cryptocurrencies indicates “excesses in a crypto industry that is ripe for a purge in 2022.”
“Shiba Inu in the second half of 2021 and Dogecoin in the first half were examples of speculative hype memcoins. They are better classified as unprecedented 24-hour global entertainment,” McGlone sneered.
On January 5, the Fed announced it would raise interest rates in stages to fight inflation. For the first time it will be raised to 1% in 2022. After that, the rate will be revised three times in 2023 and twice in 2024.
This led to a plunge in the stock markets (the NASDAQ fell more than 3%, the S&P 500 fell almost 2%, the Dow Jones fell 1%) and cryptocurrencies. In particular, bitcoin plummeted below $43,000 per coin and Ethereum fell to $3,200.
Conservative investors will get rid of SHIB and DOGE cryptocurrencies
According to the cryptocurrency exchange, the Fed publication also caused Dogecoin and Shiba Inu to fall. By January 10, SHIB and DOGE were down more than 12% to $0.00002814 and $0.1497616, respectively. Dogecoin’s market capitalization dropped to $19.9 billion and Shiba Inu to $15.4.
Mike McGlone predicts that the bulk of conservative investors who have started using digital assets will begin to get rid of unreliable assets. That process has already begun.
The exchange of speculative crypto-assets competing with Bitcoin, Ethereum and Tether, according to the expert, already makes investors cautious. The analyst recalled that Dogecoin and Shiba Inu displaced Litecoin and XRP from the top ten cryptocurrencies by capitalization in 2021 in a wave of popularity, but subsequently fell off the prestigious list themselves.
“We expect the stable trio — bitcoin, ‘ethereum’ and cryptodollars (stabelcoins — fiat-currency-backed cryptoassets. — Ed.) — to maintain their dominance. The top newcomers of 2021, Binance Coin and Solana, could end the streak of temporary visitors in the top five,” the report summarizes.
