Shiba Inu (SHIB 2.11%) wowed investors last year with its 45,000,000% gain over the course of 2021. But this year, the popular meme token hasn't taken the same path. Shiba Inu declined 70% in the first half of the year. The reason? There are many.
Concerns about the economy have weighed on riskier assets -- and this includes the cryptocurrency market. Investors also worried about Shiba Inu's ability to stand out from other rivals -- and justify big gains.
Now, with six months left in the year, could Shiba Inu bounce back? Let's find out.
The power of the Shib Army
First, let's look at why Shiba Inu soared last year. A lot of credit should be given to the Shib Army. That's the token's group of loyal fans. They've invested in this young crypto player and supported it on social media. As the token gained in value, others jumped in. Fear of missing out drove this movement. Since the crypto has always traded at a fraction of a cent, investors could easily afford to give it a try.
Shiba Inu's gains didn't stem from any sort of competitive advantage. It's a token based on the Ethereum blockchain. And it's mainly used for payments and staking.
So what may help Shiba Inu bounce back from this year's losses? A lot is happening in the world of Shiba Inu right now. Developers are working on Shibarium. This is a layer-2 solution that would help solve the big problem of operating on Ethereum -- slow transaction speeds and high fees. All Shiba Inu tokens will move to Shibarium once the platform is launched. That's expected to happen this year.
Shiba Inu also is entering the metaverse. It will eventually offer more than 100,000 plots of virtual land for sale. The initial land offering included about 36,000 plots. And so far, 53% of these have sold, according to Planet Crypto.
The latest news is developers are working on a stablecoin called Treat. It will be used as a reward token in the metaverse and will be linked to the Shiba Inu collectible card game. That's also in development right now.
A reason for a rebound
All of these projects are either in the process of releasing or are set to hit the market this year. And together they offer a big reason for Shiba Inu to rebound and even gain. But I don't think that will happen, at least not to a great degree.
Here's why. Of course, these projects are good news. They will make Shiba Inu better and more useful tomorrow than it is today. But they still don't resolve one big problem: Shiba Inu still doesn't offer something unique. Rivals such as The Sandbox already are way ahead when it comes to the metaverse. As for speed and transaction fees, Ethereum is working on an update that should resolve those problems.
Many cryptocurrencies offer staking opportunities and can be used for payment. With thousands of cryptocurrencies in existence, for a player to rise to the top and stay there, it will have to offer some sort of significant advantage. And from what I can see so far, Shiba Inu doesn't.
So the latest developments may help Shiba Inu regain some momentum. But I don't think they will be enough to lead to a big rebound by next year -- or lasting gains.
