There are no shortage of ways for people to invest their money and grow their wealth over time. Buying property, physical gold, bonds, and even bank certificates of deposit (i.e., CDs) can help increase your nest egg. But over the very long haul, no investment vehicle has helped folks generate a higher average annual return than stocks.
However, the short term is another story.
Since the March 2020 bottom, the aggregate value of all cryptocurrencies has catapulted higher by more than a factor of 20 to almost $2.9 trillion. Leading the charge, of late, is meme coin Shiba Inu (SHIB -4.82%).
Crypto investors have been enamored with Shina Inu-inspired coins in 2021. Image source: Getty Images.
Here's how Shiba Inu delivered life-altering gains in a little over one year
The gains in SHIB tokens since its debut a little over 15 months ago are nothing short of amazing. After initially printing a trade of $0.00000000051 on its debut day, Shiba Inu coin sat at $0.00005273, as of the very early morning hours of Nov. 15. It might be tough to tell with so many zeroes involved, but this works out to your run-of-the-mill gain of 10,339,116%! To put this into context, a $10 investment in SHIB on Day 1 would have made you a millionaire today.
As you can rightly imagine, gains like this aren't possible without the fear-of-missing-out (FOMO) coming into play. Cryptocurrency investors are keenly aware of the nearly 8,000,000,000% gain Bitcoin has delivered since the beginning of July 2010, and believe that life-altering gains remain possible, even with SHIB tokens up by more than 10,300,000% since Aug. 1, 2020.
Visibility is proving key for Shiba Inu, as well. As the hottest digital currency has risen the market value leaderboard, more and more cryptocurrency exchanges have welcomed SHIB for listing. Having more exchanges to buy Shiba Inu coin has boosted liquidity and increased awareness.
The world's richest person also played a role in pushing Shiba Inu briefly into the top 10 of the most valuable cryptocurrencies. Tesla Motors CEO Elon Musk recently adopted a Shiba Inu-breed dog, which he named Floki. Anytime Musk posts about his dog or the Japanese Shiba Inu breed, investors tend to pile into any coins inspired by Shiba Inus.
Lastly, there's been something of an inherent buy bias that's lifted SHIB tokens. Whereas a multitude of derivative options have opened the door for big money to more easily bet against Bitcoin, pathways to bet against other cryptocurrencies are few and far between. With little in the way of a short-selling presence, Shiba Inu has motored higher.
Image source: Getty Images.
A major milestone is upcoming for the world's hottest cryptocurrency
And the catalysts just keep coming.
Later this month, Shiba Inu will likely hit its next major milestone: 1 million investors.
A quick look at Etherscan reveals there were almost 963,000 unique wallet addresses holding SHIB tokens, as of Nov. 15. Although hitting 1 million "hodlers" is purely psychological, it reinforces what is effectively the Shiba Inu community's greatest strength: creating buzz on social media boards. Aside from Bitcoin and Ethereum, Shiba Inu is the third most-searched cryptocurrency on Google in 2021.
Being able to grow the community and create social media momentum has helped Shiba Inu in three specific ways. First, it's the core catalyst behind the FOMO that's driven SHIB tokens to the moon. If investors feel that they have an army of like-minded people in their corner, they're liable to be willing to chase the price of SHIB tokens even higher.
Secondly, a growing community can help expand ShibaSwap, the decentralized exchange that was launched in July. ShibaSwap is helping to increase liquidity and allows hodlers to stake their coins to earn passive income. It's a critical tool that could turn momentum chasers into buy-and-hold investors.
And third, social media buzz looks to be the direct reason Shiba Inu could land its first major merchant, movie theater chain AMC Entertainment (AMC -0.59%). Late last month, AMC CEO Adam Aron posted a poll on Twitter asking users whether the movie chain should accept SHIB, along with a handful of other tokens that are already being incorporated for payments. The overwhelming response (over 87%) was that AMC should accept Shiba Inu. In AMC's third-quarter conference call, Aron noted that his company was "exploring" adding SHIB to the list of accepted payments.
Image source: Getty Images.
Milestone aside, SHIB still has numerous flaws
Unfortunately, the vast majority of Shiba Inu's catalysts are built on FOMO and psychological factors that lack true substance. If folks were to really dig into the Shiba Inu use case, they'd be disappointed.
To start with, Shiba Inu has virtually no real-world utility. Online business directory Cryptwerk lists only 126 mostly obscure merchants as accepting SHIB tokens for payment. Although this has tripled in a month, it represents a microscopic fraction of the more than 32 million businesses in the U.S. and over 500 million entrepreneurs worldwide. Shiba Inu may be popular on cryptocurrency exchanges and social media boards, but the reality is that businesses aren't treating it as a real form of payment.
Another issue with Shiba Inu is the median hold time by investors. Admittedly, cryptocurrencies have considerably shorter holding periods than stocks, with momentum chasers skewing the data as they dive in and out of volatile tokens. Nevertheless, Shiba Inu's 18-day median hold time on leading cryptocurrency exchange Coinbase seriously lags the close to three-month hold times you'll typically see for Bitcoin and Ethereum. This tells us SHIB is being treated as a speculative play and not a payment coin with a future.
To boot, Shiba Inu is devoid of real-world competitive advantages. As noted, its community does a great job of creating buzz on social media. However, Shiba Inu is an ERC-20 token built on Ethereum's blockchain that's weighed down by processing lag and occasional high transaction fees. There's absolutely nothing about Shiba Inu that would reasonably entice businesses to choose it over other payment coin options.
The "SHIB Army" will have a milestone to celebrate in the coming weeks, but it doesn't do anything to change the bleak long-term outlook for Shiba Inu.
