If someone had told you that one of the top 10 cryptocurrencies in terms of market cap didn’t start until August 2020, you would probably think that crypto is doing something revolutionary.
But the Altcoin Shiba Inu (SHIB) is anything but revolutionary. With a maximum supply of tokens of one trillion and over 500 trillion SHIB tokens in circulation, the price of SHIB is nowhere near a cent. And although Shiba Inu is based on the Ethereum blockchain, it is difficult to imagine SHIB with the dog theme as the decentralized cryptocurrency of the future.
However, this altcoin has appreciated over 5,000,000% in value since its inception and many investors are wondering: is Shiba Inu a good investment? To understand whether or not you should invest in SHIB, you need to understand the history of altcoin, why its price has skyrocketed, and what investment risks are. We explain all of this and more below.
What is the Shiba Inu (SHIB) coin?
In August 2020, the anonymous individual “Ryoshi” created the Shiba Inu (SHIB) coin and named the cryptocurrency after the Japanese dog breed Shiba Inu.
This isn’t the first dog-inspired cryptocurrency. Since the Dogecoin meme coin began in 2013, there have been a number of similar dog coins, including Floki Inu and Kishu Inu. However, SHIB is one of the most valuable of all of these cryptocurrencies and is commonly referred to as the “Dogecoin Killer” due to its goal of beating Dogecoin in terms of market capitalization.
And if you check out the Shiba Token website, the project definitely looks serious. For starters, SHIB is an ERC-20 token, the standard token used on the Ethereum blockchain. Shiba Inu’s website also states that it is “a decentralized meme token that has evolved into a living ecosystem”.
There’s even a whitepaper, aptly called WoofPaper, in which Ryoshi explains the importance of decentralized finance (DeFi) and why Shiba Inu and its community are so powerful.
What is ShibaSwap?
In July 2021, the Shiba Inu community launched ShibaSwap, a decentralized cryptocurrency exchange where people can trade with SHIB. The platform has also created two sub-tokens for the community: Bone and Leash.
Bone tokens are used for governance so that bone holders can vote on future changes to SHIB. In contrast, leash tokens are a second token in the Shiba Inu ecosystem with an offer just north of 100,000 tokens.
These new tokens relate to various ShibaSwap functions that allow people to benefit from being stakeholders. For example, ShibaSwap users can “bury” SHIB, Bone and Leash tokens to earn interest. This is comparable to cryptocurrency staking and high-yield interest accounts like the ones you get at BlockFi or Celsius.
Members can also “dig” on ShibaSwap, which basically means depositing cryptocurrency to increase exchange liquidity. In return for digging, you will receive bone markers as a reward. Shiba Inu is even launching an NFT marketplace where you can browse a collection of over 10,000 Shiboshis, the community’s own NFTs.
The NFT marketplace is a recent development that is still gaining a foothold. Although the own decentralized exchange, the staking and liquidity pools as well as the governance tokens appear superficially legitimate, many still regard SHIB as nothing more than a meme.
A story of Shiba Inu – what’s behind the recent price hike?
Despite its critics, Shiba Inu is one of the most valuable cryptocurrencies by market capitalization. So this increase in value begs the question, “Why did Shiba Inu become so valuable?”
First of all, SHIB certainly started at the right time. A number of Tweets from Elon Musk the allusion to Dogecoin or the direct mention of the Altcoin resulted in an increase in the value of Dogecoin. Musk continued this tweeting pattern that led to his appearance on SNL in May. The social media hype saw the price of Dogecoin soar until the show actually aired.
This is the Dogecoin story. But like many altcoins, Shiba Inu benefited from the excitement surrounding Dogecoin and also rose over 5,000% in five days, according to CoinDesk.
Media attention didn’t stop there. Ryoshi, the founder of Shiba Inu, sent half of Shiba’s token stash to Vitalik Buterin, the founder of Ethereum. However, Buterin burned most of his SHIB holdings a few days later, stating that he did not want so much power over the circulating SHIB offerings. Buterin also donated SHIB tokens worth over $ 1 billion to India’s Covid-19 Crypto Relief Fund.
Buterin’s actions caused the price of SHIB to drop, and the altcoin hovered between $ 0.000006 and $ 0.000009 over the next several months.
During this time, Shiba Inu’s fate seemed sealed. But when Coinbase, a leading cryptocurrency exchange, announced their support for SHIB on their platform in September, prices started to rise again. The general rally in Bitcoin and crypto during this period also created the perfect bullish scenario for Shiba Inu to rise in price.
And unsurprisingly, another catalyst came back from Elon Musk. On October 3, 2021, Musk’s tweet his new Shiba Inu dog made prices soaring.
When a Change.org petition to list SHIB on Robinhood went viral and garnered over 400,000 signatures, Shiba Inu achieved the highest award in history. And with cryptocurrency whales now putting millions of dollars in Shiba Inu, the price has continued to rise.
Should You Invest in Shiba Inu?
Fear of missing out, or FOMO, is a common emotion that investors can experience with cryptocurrencies. After all, when you hear of investors putting $ 8,000 in Shiba Inu and making $ 5.7 billion, it’s easy to feel like you’re missing out on the next gold rush by sitting on the sidelines.
However, as with any alternative investment, you need to understand the risks and potential returns of investing. For something as volatile as SHIB, this is even more important.
So should you invest in Shiba Inu? And how do you decide if this altcoin is right for you? Well, if you want to invest in SHIB because you believe in the future of decentralized funding, you are probably barking the wrong tree.
Shiba Inu is based on the Ethereum blockchain. But despite its own exchange, SHIB is not paving the way for DeFi. Ethereum is of course the pioneer in decentralized finance. Additionally, there are other cryptocurrency projects that have more obvious real-world uses than Shiba Inu, such as Cardano and Solana.
In addition, Shiba Inu’s token offer is causing some concern and has been criticized by Wall Street pros such as “The Big Short” investor Michael Burry. But even if you buy your way into SHIB’s future in DeFi and don’t worry about the token offering, the volatility is a significant risk.
As we’ve seen, a single tweet or celebrity endorsement can drive the price of Shiba Inu up or down. In addition, according to Coinbase data, the average holding time for SHIB is only 14 days; hardly any signal that this is a buy-and-hold cryptocurrency.
The bottom line is: At the moment, Shibu is only a game for speculative, short-term traders. In contrast to other coins like Bitcoin, there are no fundamental reasons to invest in Shiba Inu. So you should never spend money on it that you cannot afford to lose.
Will SHIB reach $ 1? 0.01? – Future price forecasts and warnings
One of the reasons a lot of investors flock to altcoins like SHIB is because they are so cheap. On paper, this sounds like an easier way to get rich than investing in more expensive cryptocurrencies. After all, if you buy a million SHIB for less than $ 100 and the price hits $ 1, you have just become a millionaire.
Shiba Inu promoters and people who want to pump and dump their tokens are unfortunate proponents of this mindset. There are many SHIB price predictions and targets out there with people asking if SHIB can hit a dime or a dollar.
These Shiba Inu price predictions are where you encounter the SHIB token supply issue. With over 500 trillion tokens currently in circulation, that equates to a market cap of over $ 5 trillion when Shiba Inu hits $ 0.01. The total value of the US economy is about $ 21 trillion, according to the World Bank. Therefore, given the current token numbers, it is practically impossible to hit a penny with SHIB.
In fairness, Shiba Inu developers need to find ways to reduce the total number in circulation. As already mentioned, holders can bury SHIB tokens with ShibaSwap and withdraw tokens for a certain period of time. The new NFT marketplace also has a burning mechanism in which SHIB tokens are burned when people buy and name their Shiboshis.
But even with these promotions, there are simply too many SHIBs in circulation for them to reach a cent, let alone a dollar. If a huge amount of tokens were burned or everyone bought their way into Shiba Inu, the price could potentially go much higher than current levels. But from a simple supply and demand perspective, it’s nearly impossible for SHIB to hit $ 0.01 or more.
All of this means that you should be very careful with SHIB price predictions that advertise such high numbers. Simple math can usually tell you whether or not a price prediction for an altcoin is based on reality. So always do your due diligence.
How to buy SHIB
If you want to invest in Shiba Inu or try your hand at swing trading this volatile altcoin, you have several options.
One of the easiest ways to buy Shiba Inu is to open a Coinbase account and buy the crypto there. Coinbase is one of the most popular exchanges in the world. And you can link your bank account to your Coinbase account to buy SHIB with funds from your bank.
Binance and Voyager, two other popular cryptocurrency exchanges, also allow you to buy and sell Shiba Inu as well as dozens of other cryptocurrencies and stablecoins.
Does Shiba Inu Make Sense For You?
As mentioned earlier, investing in Shiba Inu is currently similar to gambling. The average holding time for SHIB on Coinbase is 14 days. And the altcoin can experience massive price fluctuations with just a single tweet or message.
If you want to invest in cryptocurrency, there are many other more reliable options out there. With platforms like Linus and BlockFi, for example, you can generate passive income with your money and your cryptocurrency. Alternatively, you can consider investing in cryptocurrencies with more history, such as Bitcoin and Ethereum.
Whatever you choose, understand your risk tolerance and how much of your investment portfolio you want to invest in crypto. Altcoins like Shiba Inu can and have made millionaires. But if you’re not ready for a wild ride and you have the potential to lose it all, this is not the investment for you.