You can rightfully call it the top dog among cryptocurrencies. No, Shiba Inu (CRYPTO:SHIB) doesn't claim the highest market cap. That honor goes to Bitcoin. However, no other digital coin has come close to delivering the gains that Shiba Inu has this year.

The meme coin has catapulted into the top 13 cryptocurrencies in the world based on market cap. But is it too late to buy Shiba Inu?

A person looking a laptop with a Shiba Inu dog sitting in an adjacent chair.

Image source: Getty Images.

Let the good times roll

Let's first look at the bull case for Shiba Inu. Could the good times keep rolling for the digital token? There are a few reasons to think so.

The value of a cryptocurrency primarily depends on supply and demand, as is the case for other assets as well. Value tends to go up with either limited supply, increased demand, or both.

Shiba Inu's supply is intentionally large, with a circulating supply of 549 trillion coins. However, it's possible that demand for the token could rise at least in part due to the fervor of the SHIBArmy -- an enthusiastic online community of Shiba Inu supporters.

Demand for Shiba Inu could also increase with the upcoming Ethereum 2.0 upgrade in 2022. Shiba Inu runs on the Ethereum blockchain, which is currently much slower and has steeper costs than other blockchains. That will change with the major upgrade slated for next year. The resulting improvements could boost support for Shiba Inu, especially if more merchants begin accepting it as a payment option.

Another way that Shiba Inu could take off with soaring demand is inclusion on more trading platforms, especially Robinhood. This would bring the cryptocurrency more into the spotlight for mainstream investors.

And there's always the possibility that Shiba Inu could enjoy a surge in demand thanks to Elon Musk. Although the billionaire doesn't personally own the cryptocurrency, his tweets about his pet Shiba Inu have helped spark interest in SHIB coins. If Musk decided to buy SHIB and make it public, the token would probably go to the moon.

The thrill is gone (or soon will be)

On the other hand, there are some solid arguments to be made that the thrill is gone for Shiba Inu, or at least soon will be. Probably the most compelling case that it's too late to buy the coin is that history isn't on its side.

Take a look at other cryptocurrencies that have skyrocketed in the past over a short period of time. All of them ended up eventually plunging by at least 90%. Shiba Inu could very well suffer a similar fate.

The competition among cryptocurrencies for investors is also fierce. I mentioned earlier that Shiba Inu currently ranks No. 13 based on market cap. But it was even higher on the list. In just the last couple of weeks, Avalanche has moved past Shiba Inu. Others just might follow in Avalanche's footsteps.

Aside from a loyal group of online supporters, does Shiba Inu have any distinct competitive advantages? Not really. Many other coins have greater real-world utility. 

Uncertainty

I'd say that the best answer as to whether or not it's too late to buy Shiba Inu is simply that it's impossible to know for sure. Maybe the cryptocurrency will soar with the Ethereum 2.0 upgrade, potential inclusion on Robinhood, or a surprise move by Elon Musk. Perhaps Shiba Inu will tank as other coins attract investors' interest.

However, one thing we can know for certain is that Shiba Inu won't repeat its performance over the last 12 months. If it did, the cryptocurrency's market cap would be bigger than the top 10 largest publicly traded companies combined. That's not going to happen.

My hunch is that Shiba Inu will experience a steep decline sooner or later just as the other high-flying cryptocurrencies in the past have. What I don't know is how soon or how late that drop will be.

Perhaps Shiba Inu will keep moving higher in the meantime. And maybe I'm flat-out wrong. Whether or not it's too late to buy Shiba Inu, I think there are other cryptocurrencies that are more attractive picks right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.