If there's anything that the 2022 crypto meltdown taught investors, it's that you need to do the proper amount of due diligence before getting involved with digital currencies. Get-rich-quick schemes abound, and even popular cryptos with billion-dollar market caps are not necessarily safe investments. In a market downturn, they can lose almost all of their value overnight.
With that in mind, ApeCoin (APE -2.26%) and Dogecoin (DOGE -4.12%) are two cryptos to avoid no matter what. Both have significantly underperformed the market in 2023 and show few signs of turning things around anytime soon.
ApeCoin
When it was launched in March 2022, ApeCoin generated a lot of hype and speculation. This new token promised to become the primary way that everyday investors could get access to the upside potential of the Bored Ape Yacht Club, which remains one of the most popular non-fungible token (NFT) collections ever.
At the time, celebrities were paying hundreds of thousands of dollars for a single Bored Ape NFT, and prices seemed to be headed to the moon.
But shortly after ApeCoin's debut, prices in the NFT market began to collapse, and so did any chance of ApeCoin ever becoming a good long-term investment. Floor prices for Bored Ape NFTs are now at an all-time low. In some cases, million-dollar investments are now worth a paltry $60,000.
Until NFT floor prices start increasing, it's almost impossible for ApeCoin to rally, given the close relationship between the Bored Ape NFT collection and the token.
Several attempts to prop up the price of ApeCoin have now failed. There were plans for a new metaverse world called Otherside. There were plans to transform ApeCoin into a utility coin, filled with real-world uses, such as the ability to buy burgers and fries at a Bored Ape-themed fast-food restaurant.
There were plans to turn the Bored Apes into a new type of entertainment brand powered by the Web3 creator economy. And there were attempts to create VIP experiences for ApeCoin token holders, including an NFT game featuring cartoon apes running through underground sewers.
Given all of these ill-fated attempts to boost the value of ApeCoin, this is clearly a crypto token to avoid. Sure, the NFT market might rally. And, yes, Bored Apes continue to be one of the top NFT collections in the world. But there's a good reason why ApeCoin is down nearly 50% for the year: Investors have grown weary of all the failed attempts to turn around this once-promising crypto project.
Dogecoin
As the original meme coin, Dogecoin holds special meaning for early crypto investors, which is why it feels so awful putting it on the list of digital coins to avoid. But its best days are now far behind it.
For the year, Dogecoin is "only" down 3%. But since the peak of Dogecoin mania in May 2021, when Elon Musk appeared as The Dogefather on Saturday Night Live, the price has collapsed by nearly 90%.
Image source: Getty Images.
In 2022, as soon as rumors started to swirl around his impending acquisition of Twitter, there were repeated suggestions that Musk had big plans for some kind of Dogecoin integration with Twitter. This year, he even went so far as to swap out the iconic Twitter bird for the Dogecoin mascot, the Shiba Inu dog.
However, there are no signs of any sustainable recovery in the price of Dogecoin. Making matters worse, Musk is now embroiled in a class action lawsuit with Dogecoin investors, who claim that he has been manipulating the value of the crypto for personal gain.
At the end of the day, it remains a highly speculative meme coin with little to no real-world utility. It started as a joke back in 2013, and 10 years later, it's still a joke. But this time around, no one is laughing.
Takeaways for investors
There are two big lessons here: One, you shouldn't be chasing a new trend solely in the hope of cashing in big, as we've seen with NFTs. And two, you shouldn't invest in crypto as part of a get-rich-quick scheme, as we've seen with meme coins.
There are plenty of good crypto investments out there with solid long-term growth prospects. Unfortunately, Dogecoin and ApeCoin are not among them. I'm not monkeying around with ApeCoin, and Dogecoin remains in the doghouse.
