If you took $3 and used it to purchase the cryptocurrency Shiba Inu (SHIB -0.24%) on Jan. 1 this year, you'd have over $1.29 million today -- assuming you held on. That's a whopping 43,000,000% return. 

Yet the meme token is down 62% from it's all-time high, when your $3 would have been worth as much as $3.4 million.

It's a truly once-in-a-lifetime return that even the most seasoned investors typically never get to see. By comparison, if you purchased stock in e-commerce giant Amazon when it listed publicly in 1997 and held on, you would have earned a return of 195,900% to date. Not only is that return a fraction of Shiba Inu's return, but it would have taken 24 years compared to just 12 months for the token. 

But investors who are reading this right now might be wondering whether the current decline in Shiba Inu's price represents a buying opportunity, and of course, whether there's a chance of the same blockbuster returns experienced previously.

A sad Shiba Inu dog lying on a bed.

Image source: Getty Images.

Dogecoin offers some perspective

Dogecoin (DOGE 3.37%) is often regarded as the original meme token. It rocketed in price, and prominence, thanks to some of the world's most famous social media personalities promoting it. Perhaps one of its most renowned advocates is Tesla Motors (TSLA 3.17%) CEO Elon Musk, who drove it into the mainstream with his guest appearance on Saturday Night Live

Over the last 12 months, Dogecoin has traded from a low of $0.0031 to a high of $0.74, which represents a 23,300% increase in price. While that's relatively tame when compared to Shiba Inu, both tokens now trade at a similar market capitalization (the total value of all the respective tokens in circulation multiplied by the price). Shiba Inu is worth $18,6 billion, while Dogecoin is worth $24 billion. 

Since hitting the all-time high of $0.74, Dogecoin has steadily trended down, settling near $0.18 today. That's a steep 75% decline, so investors who purchased tokens near the highs are sitting on substantial losses. To make matters worse, it has never really looked like it would reclaim its best levels. 

But earlier this week, Musk announced that Tesla would begin accepting Dogecoin for certain items of merchandise, and that sent the price soaring almost 40% before gradually retreating. This action sums up an enormous problem that Dogecoin and Shiba Inu have in common: Only a tiny number of businesses actually accept these tokens as payment for goods and services, so consumers have no reason to adopt them. Therefore, the price increases tend to be unsustainable. 

Merchants have a minimal appetite for cryptocurrencies

Cryptocurrencies generally have been touted as a potential replacement for regular currencies, but so far the evidence suggests they're mostly just vehicles for speculation instead. Moreover, their wildly volatile nature makes them a poor store of value; would the average consumer entrust their worth in tokens like Dogecoin and Shiba Inu, which have declined in value by up to 75% in a matter of months? 

Similarly, it would be difficult for a business to justify accepting such tokens as payment because a rapid fall in value could erode its profits from actually selling goods and services. And based on a leading merchant directory, a mere 1,974 mostly obscure businesses are willing to take Dogecoin as payment. Even fewer accept Shiba Inu -- just 387 -- and about 15% of those merchants sell crypto-related services. 

Shiba Inu's recovery, therefore, hinges on the willingness of new investors to come in and pay increasingly higher prices for the token, based on no real fundamental drivers. Unfortunately, Dogecoin's history suggests there probably won't be widespread adoption of Shiba Inu (even at a speculative level). That's why the token will find it almost impossible to garner the mainstream notoriety it needs to rocket in value. 

That's why Shiba Inu will likely never recover from this crash, and investors should pay close attention to the lessons learned in past meme token frenzies, which have mostly ended with a spectacular collapse