It's well known that the S&P 500 increases roughly 10% per year on average over the long term. Investing early and then regularly adding savings can help build lasting wealth. Cryptocurrencies, on the other hand, have created millionaires in extremely short order. Bitcoin and Ethereum are the two most popular and developed cryptocurrencies, but there are many smaller ones that have generated life-changing returns.
Shiba Inu (SHIB -9.08%) is one such token. If you were bold enough to invest $100 in SHIB coin at its founding in August 2020, your position would be worth a jaw-dropping $5.9 million today. That's not a bad return for less than 18 months!
Keep reading to learn more about Shiba Inu.
Image source: Getty Images.
The Shiba Inu roller coaster
Created by an anonymous developer named Ryoshi, Shiba Inu has had a couple of big spikes in its history, which covers less than two years. Of the initial supply of 1 quadrillion tokens, 50% were sent to Ethereum co-founder Vitalik Buterin in an attempt to gain widespread credibility among the crypto community.
Shiba Inu remained under the radar until the meme-stock craze of spring 2021, when it quickly surged in value. Buterin then donated a portion of his holdings to help India fight its battle with the pandemic. This act helped to raise Shiba Inu's profile.
But after falling precipitously in mid-May, Shiba Inu stayed relatively flat until the start of October, when another wild bull run started. Tweets from Tesla CEO Elon Musk helped spur speculative interest in the coin. And in November, movie-theater chain AMC Entertainment Holdings even announced that it would begin accepting payments in Shiba Inu within the next few months. But the token has come crashing since then. Shiba Inu is now the 14th largest cryptocurrency, with a market cap of $16 billion.
Shiba Inu has no advantages
Because Shiba Inu is built on top of the Ethereum blockchain, it has more functionality than its rival Dogecoin, which runs on its own blockchain that's built solely for payments. As a result, the Shiba Inu community has created a decentralized exchange, called ShibaSwap, allowing SHIB holders to stake their holdings and earn rewards. This encourages investor loyalty. Additionally, the community has plans to develop a platform for non-fungible tokens (NFTs), called Doggy DAO.
While these projects are meant to drive utility for Shiba Inu, which should support higher SHIB prices over time, I'm skeptical. There are 16,763 different cryptocurrencies out there, with newer ones coming out all the time. Shiba Inu has no competitive edge that gives it even the slightest chance of long-term survival. UniSwap, a decentralized exchange, and OpenSea, an NFT marketplace, are more developed and show more promise right now than what Shiba Inu's community is working on.
Like other meme tokens out there, Shiba Inu's price fluctuates based on various hype cycles on social media. Furthermore, recent rumors, like its potential listing on the Robinhood Markets app, can spark a short-term price pop. Obviously, these events are unpredictable, and it's more akin to gambling than actual investing.
While Shiba Inu is one of many exciting stories in the crypto world, it's best to stay away.
