The cryptocurrency Shiba Inu (SHIB 2.55%) has wowed investors with its path up the charts. It's now the 13th biggest cryptocurrency by market value. And it's climbed more than 44,000,000% this year. Today, it would have to rise a lot less -- by about 2,000,000% -- to reach the $1 mark.
Right now, Shiba Inu trades for a fraction of cent. And that means a small investment could result in considerable riches if the cryptocurrency continues to gain ground. So, now the big question is whether you should buy this dynamic cryptocurrency while it's below $1.
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Could it reach $1?
First, let's take a look at a more important question: Could Shiba Inu actually reach $1? On one hand, it looks very possible. As I mentioned, this crypto player already has proved it has the ability to win over investors and skyrocket. But there are two reasons I think reaching a dollar may be difficult for Shiba Inu.
One has to do with simple math. Today, about 549 trillion Shiba Inu coins are in circulation. If the coin climbs to $1, Shiba Inu's market value would equal $549 trillion. By comparison, online retail giant Amazon's market value is only $1.74 trillion. So it seems unlikely that can happen with the current number of coins out there. That said, there have been recent reports of an upcoming coin burn -- that would reduce supply. And as a result, open the door to more gains. If that happens periodically, my math argument may not hold up down the road.
But even in that case, I'm not convinced Shiba Inu can rise to $1. And that's because the crypto hasn't proved it can stand out from the rest -- and offer real-world utility. The creator of Shiba Inu, known only as Ryoshi, launched the cryptocurrency in August of last year. It's a token based on the Ethereum blockchain. Investors can buy or sell Shiba Inu as an investment. You also can stake your tokens to make passive income. And about 500 merchants accept Shiba Inu as payment. But these features don't set Shiba Inu apart from the thousands of other cryptocurrencies out there.
1 million investors
So, I'm not convinced Shiba Inu has what it takes to make it to $1. That said, the cryptocurrency could move higher from its current level. It has a dedicated group of supporters -- called the "ShibArmy." They've not only invested in Shiba Inu, but they've also kept this crypto player at the center of the social media stage. Today, Shiba Inu has more than 1 million investors, according to Etherscan.
Does this mean you should buy this crypto before it extends this year's gain? I wouldn't recommend it. Here's why: There are plenty of other cryptocurrencies out there that offer a lot more real-world utility. And these sorts of players are more likely to increase over the long term. Shiba Inu may have more fuel in the tank right now. That could result in a quick gain for those who buy it. But as rivals outpace Shiba Inu in innovation and utility, I fear this popular player will eventually be running on empty.
