Shiba Inu (SHIB -2.47%) has been one of 2021's major success stories from a market performance point of view. This young cryptocurrency soared more than 42,000,000% since the beginning of the year. And it climbed the market value charts to become the 13th-biggest cryptocurrency by market cap, according to CoinMarketCap.
Now, heading into the new year, you may be wondering about what will happen next for this crypto mover. And whether there's still time to get in on the action. Will Shiba Inu continue to make investors rich? Or is the story over for this popular meme token?
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Shiba Inu's popularity
First, let's take a look at the reason behind Shiba Inu's popularity. And that's the community of supporters rallying behind it. The idea of community actually was a building block of this crypto player. Its founder -- known only as Ryoshi -- called it "an experiment in decentralized spontaneous community building," according to the Shiba Inu whitepaper.
This "experiment" seems to have worked so far. Shiba Inu recently reached a big milestone: It now has more than 1 million investors. It's important to remember Shiba Inu only launched in August of last year. So, it's quickly gained major momentum.
Shiba Inu only trades for a fraction of a cent. And, seeing gains so far, a fear of missing out has spurred many to pile into the cryptocurrency at those levels.
Now, let's get back to our questions about this cryptocurrency's future -- and whether investors should bet on it. Shiba Inu has lost some of its momentum in recent weeks. It's down 62% from a peak reached in October. But many cryptocurrencies have declined during this period. So that isn't what worries me the most.
What does worry me is the fact that Shiba Inu doesn't offer anything that makes it stand out from the thousands of other cryptocurrencies out there right now. Rivals host decentralized applications (dApps) that can be used to transform how business is done in various sectors, for example. Shiba Inu is built on the Ethereum blockchain. But it isn't a blockchain itself that can offer dApps.
Hold, trade, or pay
Shiba Inu is simply a currency. Investors can hold onto it as an investment, trade it, or use it to make purchases. Shiba Inu includes three types of tokens: the native Shiba currency used for trading, the Leash token that offers staking awards for the validation of transactions, and the Bone token used for voting on proposals.
Just days ago, payment network Flexa said Shiba Inu now can be used as payment where Flexa is accepted -- that means at more than 40,000 merchants. That's positive. But other cryptocurrencies also are used for payment.
And new rivals are constantly popping up. Only 66 cryptocurrencies existed back in 2013, according to Statista. Today, more than 8,000 are listed on CoinMarketCap. Sure, there may be some short-term increases ahead for Shiba Inu. But considering Shiba Inu's performance this year and the fact that it doesn't stand out from the crowd, I'm wary about this player's ability to deliver significant and lasting gains. So, I wouldn't buy shares of Shiba Inu at this point. Community support can only take a cryptocurrency so far.
