Despite the broader market doing well, especially the tech-laden sectors, the cryptocurrency market has been slowly sliding downwards in recent weeks. Bitcoin (BTC-USD) and Ethereum (ETH-USD), are cryptos that investors shouldn’t stress to sell during a recession. The capital inflow into them seems to have reversed course as investors start becoming more comfortable with traditional assets.
However, top cryptos like BTC and ETH are not bad investments right now. If anything, investors should snap up both assets for cheap before rate cuts are on the table and the Bitcoin halving event triggers a rally sometime next year. We’ve seen that a banking crisis favors non-custodial assets considered “safe,” such as Bitcoin, and with a recession on the horizon, BTC is not in a danger zone.
On the other hand, there are cryptos that investors should dump during this selloff. Many projects are facing trouble or don’t have the edge they need to succeed. They are bleeding red ink, and going contrarian on them can be very profitable.
Here are three such cryptos to sell before a recession:
| Symbol | Company | Price |
| BNB-USD | Binance Coin | $247.04 |
| BAL-USD | Balancer | $4.46 |
| OKB-USD | OKB |
Binance Coin (BNB)
While Binance Coin (BNB-USD) is a useful crypto project and is the largest cryptocurrency exchange, I do believe that it is time to take the exit here. That primarily has to do with the Securities and Exchange Commission filing 13 charges against Binance for “operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities.”
These charges should not be taken lightly, as the “unregistered offer and sale of securities” charge alone has caused Ripple’s XRP (XRP-USD) to trade at a depressed level for the past two and a half years. I believe BNB can have a similar fate, if not worse, if the lawsuit lingers on for months.
Binance does argue in a counter report that “Because Binance is not a U.S. exchange, the SEC’s actions are limited in reach.” However, it is important to remember that almost a fifth of its revenue still comes from the U.S., and a ruling against Binance can have worldwide implications — it’s not worth the risk to hold BNB.
Balancer (BAL)
Balancer (BAL-USD) is a cryptocurrency that powers a decentralized exchange (DEX) on the Ethereum blockchain. Users can trade ETH and ERC-20 tokens in customizable liquidity pools without intermediaries. I am very optimistic about decentralized exchanges due to the scrutiny centralized exchanges face, and I do believe they will lead the overall market share in the future, collectively. However, Balancer has one massive caveat regarding tokenomics, and I would not recommend holding this crypto in any way.
The caveat here is that Balancer has a high inflation rate that is very volatile. The price might be down 94% from its all-time high, but the market capitalization remains near February 2021 levels. Thus, there is a significant downside risk here. Combined with its high inflation and price action, Balancer is on the list of cryptos to sell before a recession, as I believe it can easily drop below $1 in one year or less.
OKB (OKB)
OKB (OKB-USD) is a cryptocurrency that powers the OKX platform, one of the largest crypto exchanges in the world. This centralized cryptocurrency surged nearly 600% from its trough last year to its peak. That’s mainly due to the hype surrounding the token burn and supply reduction. However, I believe it is unsustainable and it is better to sell the token as it seems to be peaking.
Of course, token burns are a good thing overall, but this is not something you can do forever to increase a token’s price exponentially. The burn wallet currently holds 64 million tokens, and with the OKB token making a U-turn, it is best to go contrarian here.
On the date of publication, Omor Ibne Ehsan 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.
