There's no denying that Shiba Inu (SHIB -1.63%) was a monster investment for those cryptocurrency traders who got into the token early this year. Next year could be a different story, though, given the meme coin's limited utility beyond its novelty appeal. There is a bullish case to be made for Shiba Inu, but there are more obscure digital currencies with clearer paths for growth.
For example, Decentraland (MANA -1.68%), Terra (LUNC -0.97%), and Gemini Dollar (GUSD) are three cryptocurrencies that deserve a little more attention. They're flying under the radar for now, but they all have better potential than Shiba Inu at this point.
Image source: Getty Images.
Decentraland
The bull thesis for owning a certain crypto shouldn't simply boil down to the greater fool theory -- i.e., the argument that someone else down the line will pay more for what you're holding. It also can't be "because you can buy stuff with it," as that's a taxable exit strategy that applies to most digital currencies. Utilization is the key, and that's where Decentraland's MANA stands out.
Decentraland is one of the more popular virtual realms built on blockchain tech. There are roughly 300,000 monthly active players hanging out in Decentraland so far. Folks are free to roam around the digital digs, but if you want to purchase a plot of land, trade digital goodies, or otherwise monetize your enhanced presence, you'll have to settle up your trades with MANA, Decentraland's official in-world currency. Right now, roughly a third of its monthly users own some MANA.
As the experience's official governance token, Decentraland's popularity should grow as the game does. It's a crypto with tangible fundamentals, something that makes investing in gaming coins attractive to traditional investors. If the game continues to find its audience, then its in-world currency should continue to appreciate. If things go the other way ... well, no one would be surprised to see it depreciate. Momentum is on its side, though, as the number of active users in the game has doubled since the springtime. Decentraland even hosted a virtual music festival two months ago that attracted dozens of acts and was headlined by Deadmau5 and Paris Hilton.
Terra
Terra is the native token of a smart-contract-fueled stablecoin project. If you're familiar with TerraUSD (USTC 1.81%) -- the decentralized stablecoin that aims to trade as close to the $1 mark as possible -- you already know Terra's handiwork. TerraUST has gained popularity as it currently generates as much as 20% in annual interest when staked through the Anchor savings and lending protocol that Terra introduced earlier this year.
Yield-chasing crypto traders have catapulted TerraUST into the mainstream. It's now the country's fourth-largest stablecoin, and the largest decentralized one. This brings us back to Terra, which has been a major beneficiary of that spike in interest around TerraUST -- in more ways than one. When demand for TerraUST climbs, Terra needs to be burned or retired to be swapped out for TerraUST. Last month, it was announced that $4.5 billion of Terra would be burned from its community pool.
Scarcity is driving Terra's value higher. It has been one of this month's biggest gainers, up by 55% as of Tuesday night.
Gemini Dollar
Stablecoins like TerraUSD -- true to their name -- tend to offer more stable returns than the more volatile standard crypto tokens. Among them, Gemini USD is particularly interesting: It's pegged to the U.S. dollar, and every month, the platform is audited to make sure that Gemini has a buck in reserve for every Gemini Dollar out in the wild. The stablecoin is available to trade across various platforms, and it's available on the Gemini exchange that created it with no trading fees.
Why would you want to own a stablecoin that is stapled to a $1.00 price tag? The key here is that Gemini is willing to pay interest -- currently at an annual rate of 8.05% -- if you participate in the Gemini Earn program that allows the platform to lend your crypto to accredited third-party borrowers that are vetted through a risk-management framework. Some non-Gemini exchanges even offer slightly higher interest rates for your Gemini Dollars. There are risks involved here, but that's to be expected when you consider the interest rates Gemini pays versus what you would get from an interest-bearing savings account or CD at a traditional bank.
