If someone had told you that one of the top 10 cryptocurrencies in terms of market cap only began in August 2020, you’d probably think that crypto is doing something revolutionary.
But altcoin Shiba Inu (SHIB) is anything but revolutionary. With a one quadrillion maximum supply of tokens and over 500 trillion SHIB tokens in circulation, the price of SHIB isn’t even close to a penny. And, while Shiba Inu is built on the Ethereum blockchain, it’s hard to picture dog-themed SHIB as the decentralized cryptocurrency of the future.
However, this altcoin has gained over 5,000,000% in value since its inception and has many investors wondering: Is Shiba Inu a good investment? To understand if you should invest in SHIB or not, you need to understand the history of the altcoin, why its price has been skyrocketing, and the investment risks. We explain all of that and more below.
What Is The Shiba Inu (SHIB) Coin?
In August of 2020, anonymous individual “Ryoshi” created the Shiba Inu (SHIB) coin, naming the cryptocurrency after the Japanese dog breed Shiba Inu.
This isn’t the first dog-inspired cryptocurrency. Ever since meme-coin Dogecoin began in 2013, there have been a slew of similar canine coins, including the likes of Floki Inu and Kishu Inu. However, SHIB is one of the most valuable of all these cryptocurrencies, and it’s commonly called the “Dogecoin killer” due to its goal to beat Dogecoin in terms of market cap.
And, when you visit the Shiba Token website, the project certainly looks serious. For starters, SHIB is an ERC-20 token, which is the standard token used on the Ethereum blockchain. Shiba Inu’s website also states it’s “a decentralized meme token that evolved into a vibrant ecosystem.”
What Is ShibaSwap?
In July of 2021, the Shiba Inu community launched ShibaSwap, a decentralized cryptocurrency exchange where people can trade SHIB. The platform has also created two sub-tokens for the community: Bone and Leash.
Bone tokens are for governance, so holders of Bone can vote on future changes to SHIB. In contrast, Leash tokens are a second token in the Shiba Inu ecosystem with a supply just north of 100,000 tokens.
These new tokens relate to various ShibaSwap features that let people benefit from being stakeholders. For example, ShibaSwap users can “bury” SHIB, Bone, and Leash tokens to earn interest. This is similar to cryptocurrency staking and high-yield interest accounts like you get with BlockFi or Celsius.
Members can also “dig” on ShibaSwap, which basically means depositing cryptocurrency to help increase exchange liquidity. In return for digging, you receive Bone tokens as a reward. Shiba Inu is even launching a marketplace for NFTs where you can browse a collection of over 10,000 Shiboshis, the community’s own NFTs.
The NFT marketplace is a more recent development that’s still finding its footing. Furthermore, while its own decentralized exchange, staking and liquidity pools, and governance tokens look legitimate on the surface, many still consider SHIB to be nothing more than a meme.
A History Of Shiba Inu – What’s Behind The Recent Price Rise?
Despite its detractors, Shiba Inu is one of the most valuable cryptocurrencies by market cap. So, this rise in value begs the question, “Why did Shiba Inu become so valuable?”
First of all, SHIB certainly launched at the right time. In early 2021, a series of Tweets from Elon Musk alluding to Dogecoin or mentioning the altcoin directly saw a spike in Dogecoin’s value. Musk continued this pattern of Tweeting leading up to his appearance on SNL in May. The social media hype saw Dogecoin’s price rise until the show actually aired, during which time Musk called Dogecoin a “hustle,” causing the price of Dogecoin to drop.
That’s the Dogecoin story. But like many altcoins, Shiba Inu benefited from the excitement over Dogecoin and also rose by 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 supply to Vitalik Buterin, the founder of Ethereum. However, Buterin burned most of his SHIB holdings a few days later stating he didn’t want so much power over the circulating supply of SHIB. Buterin also donated over a billion dollars worth of SHIB tokens to India’s Covid-19 Crypto Relief Fund.
Buterin’s actions caused a dropoff in the price of SHIB, and the altcoin hovered between $0.000006 and $0.000009 for the next several months.
During this time, it seemed like Shiba Inu’s fate was sealed. But when Coinbase, a leading cryptocurrency exchange, announced its support for SHIB on its platform in September, prices began to climb once more. Bitcoin and crypto’s overall rally during this time also created the perfect bullish scenario for Shiba Inu’s price to increase.
And, unsurprisingly, another catalyst came from Elon Musk once again. On October 3rd, 2021, Musk’s Tweet of his new Shiba Inu dog sent prices skyrocketing.
When a Change.org petition to list SHIB on Robinhood went viral and amassed over 400,000 signatures, Shiba Inu reached its highest price in history. And with cryptocurrency whales now piling millions of dollars into Shiba Inu, the price has continued to climb.
Should You Invest In Shiba Inu?
The fear of missing out, or FOMO, is a common emotion investors can experience with cryptocurrency. After all, when you hear about investors putting $8,000 into Shiba Inu and making $5.7 billion, it’s easy to feel like you’re missing the next gold rush by sitting on the sidelines.
However, like any alternative investment, you have to understand the risks and potential rewards of investing. For something as volatile as SHIB, this is even more important.
So, should you invest in Shiba Inu? And, how can 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 finance, you’re probably barking up the wrong tree.
Shiba Inu is built on the Ethereum blockchain. But despite having its own exchange, SHIB isn’t paving the way for DeFi. Ethereum is, of course, the frontrunner for all things decentralized finance. Additionally, there are other cryptocurrency projects that have more apparent real-world utility than Shiba Inu, like Cardano and Solana.
Furthermore, Shiba Inu’s token supply is a concern for some and has been a point of criticism from Wall Street pros like “The Big Short” investor Michael Burry. But even if you buy-in to SHIB’s future in DeFi and aren’t worried about its token supply, volatility is a significant risk.
As we’ve seen, a single Tweet or celebrity endorsement can spike or plummet the price of Shiba Inu. Furthermore, according to Coinbase data, the average holding time for SHIB is only 14 days; hardly a signal that this is a buy-and-hold cryptocurrency.
The bottom line is this: Right now, Shibu is only a play for speculative, short-term traders. Unlike with other coins like Bitcoin, there aren’t any fundamental reasons to invest in Shiba Inu. So you should never spend money on it that you can’t afford to lose.
Will SHIB Reach $1? 0.01? – Future Price Predictions And Warnings
One of the reasons many investors flock to altcoins like SHIB is because it’s so cheap. On paper, this sounds like an easier way to become rich than to invest in more expensive cryptocurrencies. After all, if you buy a million SHIB for less than $100 and its price reaches $1, you just became a millionaire.
Shiba Inu promoters and people looking to pump and dump their tokens are unfortunate proponents of this line of thinking. There are many SHIB price predictions and targets, with people asking if SHIB can reach a penny or a dollar.
These Shiba Inu price predictions are where you run into the problem of SHIB’s token supply. With over 500 trillion tokens currently in circulation, if Shiba Inu reaches $0.01, that’s over $5 trillion in market cap. For context, the total value of the U.S. economy is approximately $21 trillion according to The World Bank. Therefore, SHIB reaching a penny is practically impossible at current token numbers.
In fairness, Shiba Inu’s developers are creating ways to reduce the total number in circulation. As mentioned, holders can bury SHIB tokens with ShibaSwap, taking tokens out of circulation for a 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.
However, even with these actions, there are simply too many SHIBs in current circulation for it to reach a penny, let alone a dollar. If a massive amount of tokens were burned or if everyone bought into Shiba Inu, the price could potentially rise much higher than current levels. But from a simple supply and demand perspective, it’s nearly impossible for SHIB to reach $0.01 or higher.
All of this is to say you should be very wary of SHIB price predictions that toute such high figures. Simple math can usually tell you if a price prediction for an altcoin is based in reality or not. 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 simplest methods to buy Shiba Inu is to open a Coinbase account and to buy the crypto there. Coinbase is one of the most popular exchanges in the world. And you can connect your bank account to your Coinbase account to buy SHIB with funds from your bank.
Does Shiba Inu Make Sense For You?
As mentioned, investing in Shiba Inu is similar to gambling right now. The average holding time for SHIB on Coinbase is 14 days. And the altcoin can experience massive swings in price with just a single Tweet or piece of news.
If you want to invest in cryptocurrency, there are plenty of other more reliable options. For example, platforms like Linus and BlockFi let you earn passive income with your funds and cryptocurrency. Alternatively, you can consider investing in cryptocurrencies with more history, like Bitcoin and Ethereum.
Whatever you decide, understand your level of risk tolerance and how much of your investment portfolio you want to put into crypto. Altcoins like Shiba Inu can and have made millionaires. But if you’re not ready for a wild ride and the potential to lose everything, this isn’t the right investment for you.