Shiba Inu Rewarded Early Investors, But Now It’s Just Another Altcoin
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Belief in SHIB is belief that Shiba Inu is going to succeed where other coins have not proven they can....
The recent surge in the price of Shiba Inu (CCC:SHIB-USD) is a good example of two things being true at the same time.
First, buying SHIB has made some investors a lot of money (on paper or otherwise). Second, SHIB is still a speculative investment. I hope that we can all agree on that.
As I’ve written on many occasions, I’m not a crypto investor. In fact, you can safely say that I’m a crypto skeptic, but I don’t deny that there are many investors making money buying and selling cryptocurrency.
You can’t win if you don’t play. So as the crypto army likes to say when anyone disagrees with them, I’ll have to “enjoy being poor.”
However, cryptocurrency is gaining momentum. Bitcoin (CCC:BTC-USD) has been on a tear and is pushing towards its 2021 high set in April.
That is having a trickle-down effect to the altcoin market. And Shiba Inu is one of the most delicious flavors of the moment, having surged 200% in the last month.
If you believe that SHIB is still a speculative investment despite its recent growth, then you also have to admit that it means Shiba Inu is going to succeed where other coins have not proven they can.
One of the keys will be if Shiba Inu can have more utility than it currently has.
Does Shiba Inu Have Staying Power?
To my way of thinking, this is the critical question. Even though I perceive Bitcoin as being a collectible more than a currency (for now), I believe it does have staying power. In some ways it’s becoming too big to fail.
Bitcoin holders are becoming increasingly successful at changing the narrative that Bitcoin doesn’t have to be a medium of exchange.
The same might be said about Ethereum (CCC:ETH-USD). As the unquestioned king of the altcoin hill, Ethereum has the attention of the decentralized finance (DeFi) community. That means ETH will still be the “gas” that is used to power many crypto transactions.
That leaves the rest of the altcoin universe to chase Ethereum, and SHIB is part of that chase. So far, this chase to my untrained eye has been like a game of Whack-a-Mole. When one goes up, another goes down.
Many altcoins have similar use cases. This is the reality of decentralization. If anyone can create their own blockchain and their own token to use that blockchain, the field gets crowded.
This is where the underlying blockchain comes into play. In other words, what is the killer app that makes Shiba Inu different?
Right now Shiba Inu has some limited use cases. The blockchain ecosystem behind Shiba Inu is based on Ethereum and includes a proprietary decentralized exchange (DEX) named ShibaSwap and an NFT incubator.
Shiba bulls say there are more applications in the pipeline, but there are voices on the other side that aren’t as confident.
Don’t Mke SHIB Part of Your Portfolio
Shiba Inu does possess several potential advantages of many other altcoins. For example, one of many concerns I have about Dogecoin (CCC:DOGE-USD) is the limitless supply.
But unlike DOGE, Shiba Inu is an inflationary asset. There are a fixed number of SHIB coins in existence. When the currency launched, 50% of the tokens were sent to Ethereum founder Vitalik Buterin. Who, after donating 10% to India’s Covid Relief Fund made the decision to burn the other 40%. That immediately provides a bit of scarcity to the coin.
To buy into Shiba Inu is to buy into the idea that this time it’s different. It may be, but it’s still far too early to tell. I know you have to play to win, but how much capital you put at risk is up to you.
On the date of publication, Chris Markoch 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.
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.
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