After a rough summer, cryptocurrency prices are on the rise yet again. Bitcoin (BTC -1.37%) and Ethereum (ETH -2.37%) recently made headlines for reaching record highs, with Bitcoin reaching $60,000 per token and Ethereum soaring to more than $4,400 per token.

But there's another new cryptocurrency gaining attention, and investors are starting to take note.

Shiba Inu (SHIB 0.69%) launched in August 2020, and over the past few weeks, it has taken the crypto world by storm. Its price is up by more than 800% over the past 30 days, according to crypto data aggregator CoinGecko, and it's surged by a staggering 93,050,706% over the past year.

With returns like these, it may seem Shiba Inu is a no-brainer investment that can make you rich. But is it really the right investment for you? Here's what you need to know.

Shiba Inu dog against a black background

Image source: Getty Images.

Should you invest in Shiba Inu right now?

Before you invest anywhere, it's important to understand the underlying fundamentals of the investment itself. Just because a stock or cryptocurrency's price has exploded overnight doesn't necessarily mean it's a good buy, and in many cases, a sudden price increase is a red flag.

In Shiba Inu's case, its price has skyrocketed mainly because retail investors have loaded up on tokens as a short-term investment. These investors often rally around a particular stock or cryptocurrency, invest heavily so that its price increases dramatically, and then sell once the price peaks.

These types of investments can be incredibly risky, because their prices don't always align with their underlying fundamentals. Shiba Inu has very little real-world utility right now, and its price is increasing mainly because of its community of followers. If those followers decide someday to sell their tokens and move on to a different investment, Shiba Inu will lose nearly all of its value. 

That isn't to say it's impossible to make money by investing in Shiba Inu, but it is challenging. Unless it develops real-world utility and a strong competitive advantage in the crypto space, there's a good chance it will crash and burn eventually. If you don't sell at just the right moment, you could lose a lot of money.

For these reasons, Shiba Inu is a high-risk and potentially dangerous investment. It's not right for everyone, and there are safer investment strategies to maximize your earnings while minimizing risk.

A safer way to invest

The good news is that it's still possible to get rich with the stock market -- and even become a millionaire -- without betting on high-risk, short-term investments.

Although it may not be as exciting, taking a slow-but-steady approach is a far more effective way to build wealth in the stock market. This strategy involves buying strong stocks from healthy companies, and then holding those investments for as long as possible.

Fundamentally sound companies are likely to grow consistently over time, and their stock prices will gradually increase. While these stocks may not experience explosive growth, you're also less likely to lose money with this type of investment.

While short-term investments like Shiba Inu may be tempting, they're also incredibly risky. By maintaining a long-term outlook and choosing the right investments, though, you can gradually build a robust portfolio worth hundreds of thousands of dollars or more.