Shiba Inu (SHIB 3.33%) was a dream come true for some investors last year. This young cryptocurrency surged 45,000,000% over the 12 months. If you bought and sold at the right time, you might be cheering right now. Today, whether you own Shiba Inu or not, you might be wondering whether there's more potential for gains ahead -- or whether the Shiba Inu story is over.
Momentum has slowed in recent months. The cryptocurrency has slipped 65% from its peak. At the same time, Shiba Inu has a catalyst on the horizon that could be positive. So is this cryptocurrency player a buy, sell, or a hold in 2022?
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Successful community building
First, let's take a look at the past, present, and future. A person or group named Ryoshi launched Shiba Inu in August of 2020. The cryptocurrency was "an experiment in decentralized spontaneous community building," according to its white paper.
This idea has been successful so far. The crypto's loyal community -- known as the ShibArmy -- has rallied behind it. And this support has spurred gains.
But what is Shiba Inu, exactly? It's a cryptocurrency built on the blockchain Ethereum. It isn't a blockchain itself -- and that means its uses are limited. Right now, you can invest in Shiba Inu and stake your holdings to earn passive income or use Shiba Inu to make purchases at certain merchants.
All of the above is a snapshot of Shiba Inu yesterday and today. But what about the future? A catalyst may lie ahead.
The cryptocurrency is working on a project called Shibarium. Details are limited, but here's what we know so far. Shibarium will be a blockchain or a layer 2 solution running on top of Ethereum.
Ethereum is known for high transaction fees and congestion along the network. With Shibarium, Shiba Inu users no longer will have to deal with these problems. This is particularly positive because Shiba Inu aims to gain ground in the world of non-fungible tokens (NFTs) and gaming.
Shibarium's primary currency will be the Bone token. Today, that token is used for voting proposals, while the Shib token is considered the primary currency.
A catalyst for gains
The launch of such a system could be a catalyst for gains. But I'm still not convinced Shiba Inu has what it takes to rise over the long term and become a cryptocurrency leader. That's because, even with the idea of Shibarium, it doesn't stand out from the thousands of crypto players out there.
Many rivals are much farther ahead when it comes to reshaping the way that business is done. Here I mean through decentralized applications (dApps) that offer new ways of borrowing money, buying insurance, or storing personal information.
So let's get back to our question: Is Shiba Inu a buy, hold, or sell?
The cryptocurrency industry is risky, but Shiba Inu remains particularly high risk for the reason I mentioned above. So I wouldn't recommend buying this crypto player.
Some Shiba Inu investors may decide to hold if selling now would result in a loss. And there's always the possibility Shibarium will offer a short-term increase. But ideally, it's best to avoid this ultra-risky cryptocurrency and explore rivals that have demonstrated greater real-world utility.
