It finally happened. After a lengthy wait, Robinhood (HOOD 1.86%) announced last week the addition of Shiba Inu (SHIB 1.31%) to its popular trading platform. Three other popular cryptocurrencies -- Solana, Compound, and Polygon -- can also now be bought and sold on Robinhood.
Unsurprisingly, Shiba Inu soared on the news. Its price rose as much as 34% at one point before giving up some of the gains. Could the Robinhood listing even launch Shiba Inu to $0.001?
One potential way to determine how high Shiba Inu could go is to examine how other cryptocurrencies have fared after being listed on Robinhood. For example, the trading platform rolled out support for Bitcoin (BTC -1.27%) and Ethereum (ETH 4.50%) on Jan. 25, 2018, in select markets.
Shiba Inu fans won't find much to like with these historical precedents, though. After a relatively small bounce, both Bitcoin and Ethereum proceeded to sink over the next couple of months following their listings on Robinhood.
However, there's a much better case study to use. Robinhood began supporting Dogecoin (DOGE -0.37%) on July 16, 2018. Shiba Inu has a lot more in common with Dogecoin than it does with Bitcoin or Ethereum. Within a matter of days of its Robinhood listing, Dogecoin jumped nearly 40%.
Dogecoin went on to nearly double over the next couple of months. The bad news, though, is that this gain proved to be relatively short-lived. By the end of the year, Dogecoin was in negative territory.
Also, it's hard to argue that Dogecoin's big gain in late August and early September of 2018 was due to the altcoin being listed on Robinhood. Dogecoin's price actually fell 30% below its level before the Robinhood listing before it surged.
The storylines for Dogecoin and Shiba Inu leading up to their respective listings on Robinhood are quite similar. Dogecoin had skyrocketed 3,700% in the year before its inclusion on the trading platform.
But the digital token hit a rough patch in 2018. By the time Robinhood listed Dogecoin, the cryptocurrency's price had plunged 80% from its high.
Likewise, Shiba Inu delivered a spectacular performance in 2021. The meme coin vaulted more than 74,000,000% higher at one point the year before its Robinhood listing. However, Shiba Inu's price was down around 75% from that peak when Robinhood announced support for the token last week.
This doesn't necessarily mean, though, that Shiba Inu is destined to repeat the trajectory of Dogecoin. There certainly are different dynamics at play in the cryptocurrency market now than there were three years ago.
It's a long way to three zeros
Still, it's a long way to three zeros for Shiba Inu from its current price. The token would need to soar roughly 3,900% to get to $0.0001.
Perhaps the listing on Robinhood will unleash tremendous demand for Shiba Inu that pushes its price much higher. However, this scenario requires a stretch of the imagination. After all, Robinhood listings for other cryptocurrencies haven't proven to be longer-term catalysts.
Remember too that investors who use Robinhood have had other avenues to purchase Shiba Inu for a while now. Sure, the ability to trade the token on the same platform that they use for stocks and other cryptocurrencies adds a level of convenience. But it's hard to envision that the Robinhood listing will enable Shiba Inu to reach $0.0001 by itself.
The last two words in the previous sentence are important, though. There are other catalysts on the way that combined could allow Shiba Inu to generate monster returns this year. But just as Shiba Inu investors had to wait for the Robinhood listing, they'll also have to wait on these other developments.