7 Well-Known Cryptocurrencies You Should Never Invest In, According to Experts

Not everything that glitters is gold, even in the cryptocurrency market. While some coins revolutionize industries and offer solid returns, others rely solely on hype, lacking the fundamentals for lasting success.

Here are seven digital currencies you should never put your hard-earned money into.

1. Shiba Inu (SHIB)

Shiba Inu skyrocketed in 2021, delivering gains of over 46,000,000% by year-end. Yet its meteoric rise was driven by hype, not utility. By 2022, SHIB had lost over 90% of its value, a trend that could persist as its limitations become evident.

“Shiba Inu is a meme coin that gained popularity through community hype and speculative trading,” said Ronen Cojocaru, co-founder of 8081. “Its massive token supply and limited real-world use make it highly speculative. Price movements are often driven by hype cycles rather than intrinsic value.”

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2. Dogecoin (DOGE)

Dogecoin gained fame through Elon Musk’s endorsements of the currency going to the moon. Despite its reduced transaction fees and Musk’s interest in improving its blockchain, DOGE offers minimal real-world utility apart from being a payment coin.

“When DOGE launched, they rode social media hype, and everyone who entered crypto for a get-rich-quick aspect jumped in. The early investors used new users as ‘exit liquidity’ to make fortunes,” said Matthew Ruley, director of content at Dypto Crypto.

“By the time they hit a cryptocurrency exchange, they’re already done. The only difference is those users who were the original exit liquidity are looking to dump their bags on a new set of ignorant users. This is how meme coins have always worked. Don’t let the Elon hype fool you; he’s just having a good time.”

3. Tron (TRX)

Tron (TRX) is one of the more established players in the crypto space. Launched in 2018 as the native token of the Tron blockchain, it’s often praised for its high throughput and low transaction fees.

“However, beneath its polished surface lies a fundamental issue: centralization,” said David Kuang, head of research at Exponential. “For one, centralized control makes the network more susceptible to censorship or external pressures, such as government intervention. It also raises questions about fairness and governance transparency, as key decisions can be influenced or outright controlled by a small group of insiders.

“Tron’s centralization not only undermines its credibility as a blockchain project but also exposes its investors to greater risks.”

4. Cardano (ADA)

“Cardano is a protocol that has a lot of hype and a lot of institutional money. But as far as devs building on the chain? Only 40 projects. Compare that to over 1,000 on Ethereum and over 800 on BNB, and you can see why it’s such a huge disappointment,” Ruley said.

“Secondly, DeFi is worth around $100 billion right now,” he continued. “There’s only $450 million in ADA, which comes from less than 60,000 wallets. People aren’t building, and retail investors aren’t interested in the few projects operating there.

“So while the occasional puff piece does come out saying ADA will reach $1, I look at it as just that: Another puff piece trying to pump a token that doesn’t have any value,” he said.

Johny Gabriele, head of decentralized finance at CryptoOracle, also suggested that “ADA touts itself as a better version of Ethereum. However, one must be very cautious when investing in competitors of the biggest chains.

“It’s similar to buying stock in a small phone company that promises to unseat Apple. The headwinds are just too strong.”

5. Hex (HEX)

Launched in 2019, Hex markets itself as a high-yield blockchain certificate of deposit, offering high returns of up to 38% APY for staking coins for a specific period.

“The mechanics of HEX have raised significant concerns. Its rewards system heavily relies on attracting new participants to lock their tokens, creating a self-reinforcing loop where early adopters benefit disproportionately,” said Kuang. “This structure mimics characteristics of a Ponzi scheme, as returns are primarily funded by incoming participants rather than any underlying value creation.”

6. Terra Classic (LUNC)

The collapse of the Terra Luna ecosystem in May 2022 was one of the most dramatic failures in crypto history. It wiped out billions in investor funds and left Luna Classic (LUNC) as a remnant of its former self.

“Once tied to an algorithmic stablecoin (UST) designed to revolutionize decentralized finance, LUNC now exists largely as a speculative asset. Its price movements are driven by traders betting on volatility rather than any real utility or innovation,” said Kuang.

7. Pepe (PEPE)

Pepe is another meme-driven cryptocurrency you should never put your hard-earned money into.

“The currency saw rapid growth upon its launch in April 2023, benefiting from its low price and meme-based branding. Its performance is closely tied to trends in the meme coin market and sentiment on platforms like X,” Cojocaru said.

However, like most meme coins, it remains highly volatile and speculative.

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This article originally appeared on GOBankingRates.com: 7 Well-Known Cryptocurrencies You Should Never Invest In, According to Experts

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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