In order to build wealth, people have usually turned to the stock market to direct their investment dollars. But in recent years, cryptocurrencies have become a top asset class to achieving life-changing returns.
While the widely followed S&P 500 stock market index has gained exactly 100% since hitting a pandemic low on March 20, 2020, the cryptocurrency market has soared more than 1,000% during the same time.
But just like stocks, certain cryptocurrencies perform better than others. Shiba Inu (SHIB 4.74%) is one that stands out in the world of digital assets. In fact, a $100 investment in SHIB at its launch in August 2020 would be worth an unbelievable $6.6 million today.
Let's dive into the history of this meme token and find out if it makes for a solid investment candidate today.
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A ridiculous 6,600,000% return
I don't know of any other asset that posted the kind of return that Shiba Inu has. Even if you were lucky and bold enough to purchase in August 2020, the path to monster returns has been a roller-coaster ride.
Shiba Inu largely flew under the radar up until May 2021. Around that time, Ethereum co-founder Vitalik Buterin donated $1 billion worth of SHIB to help stop the spread of the coronavirus in India. Shiba Inu's value skyrocketed in a matter of days.
Then after crashing over the next five months, SHIB caught fire again in October 2021, going from $0.000007911 to $0.00008 in a span of 26 days. After that quick return of 900%, Tesla Chief Executive Officer Elon Musk revealed that he didn't own any SHIB, sending the coin lower. Despite the token's downward spiral over the past three to four months, it is still the 13th most valuable cryptocurrency today, with a market cap of more than $18 billion.
Most recently, Shiba Inu shot up 38% on Monday partly because of news of a partnership to create non-fungible tokens (NFTs) with fast-food chain Welly's. It's just another example of how wildly the price can fluctuate based on unpredictable news stories that feed into the coin's hype.
Based on the insane ups and downs, it's extremely unlikely that someone would've been able to hold on to their SHIB investment over the past 18 months. Nonetheless, it points to the remarkable returns that digital assets can generate.
Shiba Inu's future won't resemble its past
Although Shiba Inu is a programmable cryptocurrency that enables the use of smart contracts, it hasn't made much progress in terms of utility. Being built on top of the Ethereum blockchain helps with interoperability, but it's not difficult at all for someone to create their own crypto. Therefore, Shiba Inu lacks a true competitive edge in the industry,
ShibaSwap, a decentralized exchange; DoggyDAO, a marketplace for NFTs; and the planned release of gaming platform Oshiverse are some potential use cases for Shiba Inu. However, there are thousands of other projects out there with longer histories and more users. Cryptocurrency developers are gravitating toward not only Ethereum but also other promising blockchains like Cardano and Solana.
This situation makes Shiba Inu nothing more than a meme token that relies entirely on social-media hype to appreciate in value. And that's not indicative of a solid investment strategy. Sure, Shiba Inu has produced some amazing returns in its short history, but I think it's best to stay away from this dog-inspired cryptocurrency.
