Shiba Inu (SHIB -12.48%) is the latest cryptocurrency to capture the attention of investors, and it has done so in style. The meme coin was launched in August 2020 by the mysterious Ryoshi, and supporters have since branded it the "Dogecoin killer." But that's only part of the reason for the buzz surrounding Shiba Inu.

This cryptocurrency has already created tremendous wealth, and it's done so in a very short time. In fact, Shiba Inu's price has skyrocketed 3,800,000% since its inception, achieving a market value of $30 billion. Put another way, if you had invested just $30 when the token launched, you would now be a millionaire.

That said, there are many other cryptocurrencies I'd buy before adding this meme token to my portfolio. Here's what you should know.

Investor holding stacked cash.

Image source: Getty Images.

Shiba Inu: A lottery ticket

Shiba Inu does have a few interesting qualities. It's an ERC-20 token (a type of smart contract, or self-executing agreement) built on the Ethereum blockchain. That means it's compatible with the Ethereum ecosystem, including decentralized financial (DeFi) service. Shiba Inu is a key part of the DeFi exchange ShibaSwap, a platform that allows users to bury (stake), dig (provide liquidity), or fetch (exchange) tokens to earn Woof Returns (crypto rewards). And it could be incorporated into other DeFi applications in the future. That means this cryptocurrency has more utility than Dogecoin, which I should remind readers was started as a joke. 

However, there are a few problems, and I'm not even counting the dog-themed terminology, which doesn't exactly inspire confidence. DeFi Safety, an independent organization that assesses the security of DeFi products, awarded ShibaSwap a safety score of just 3% in July. The organization called ShibaSwap a prime example of "absolute negligence" and told users they were putting their money "in a black hole." That score has since been updated to 35%, which still falls far short of the minimum passing score of 70%. DeFi Safety points to the lack of transparency and ShibaSwap's anonymous team as weaknesses, which could result in users losing their stake.

Moreover, the average investor holds Shiba Inu for just 10 days, according to Coinbase. Why does that matter? It suggests that momentum is driving the price action, not a genuine belief in Shiba Inu's long-term potential. That doesn't bode well for the future. And when considered alongside other facts -- for instance, Shiba Inu's functionality is far from unique -- I think investors are better off avoiding this cryptocurrency. And if you already own Shiba Inu, now might be a good time to sell.

Bitcoin: A better buy

Bitcoin (BTC -4.96%) was the first widely adopted cryptocurrency, and it's still worth more than any other token. In fact, its market value now sits at $1.2 trillion, meaning Bitcoin accounts for roughly 43% of the value of all cryptocurrency. That popularity is a significant advantage, and it's one of the reasons I would buy Bitcoin before Shiba Inu.

The other half of my thesis is this: At the present time, there are 18.9 million Bitcoin tokens in circulation, but once that figure reaches 21 million, no new tokens will be minted. That implies 11% dilution between now and 2140, the estimated year when the last Bitcoin will be mined. By comparison, Shiba Inu is capped at 1 quadrillion (15 zeros) tokens, but only 549 trillion now exist. That implies 82% dilution in the coming years.

Of course, Bitcoin is unlikely to produce returns of more than 3,000,000%, so if you're looking for a lottery ticket, Shiba Inu may be the better option. However, longtime bull Cathie Wood believes Bitcoin's price could reach $500,000 by 2026, which implies a 715% gain over the next five years. That's still pretty darn good.