By now, it's probably safe to say Shiba Inu (SHIB 0.08%) won't repeat last year's spectacular performance this year. The popular meme token is heading for a 72% decline. Shiba Inu soared a mind-boggling 45,000,000% in 2021. That's as fans known as the Shib Army rallied behind the crypto. And the fear of missing out pushed many investors to give Shiba Inu a try.
Shiba Inu continues to intrigue investors. Nearly 20% of token reserves on exchange Crypto.com are Shiba Inu, a CoinDesk report shows. That's second only to the world's biggest cryptocurrency, Bitcoin. So, now you may be wondering whether next year may be a bright one for Shiba Inu or another grim one like this year. Should you buy, sell, or hold this dynamic player in 2023? Let's find out.
Shiba Inu fans
Shiba Inu fans know how to drum up excitement. They brought the crypto player into the forefront last year -- even though it really doesn't stand out in any way from the thousands of other cryptocurrencies out there.
Shiba Inu is a token that runs on Ethereum. It's mainly used for payments -- but only at a limited number of merchants. You also can invest in Shiba Inu and stake your holdings to earn passive income. This lack of originality makes it difficult to imagine Shiba Inu as a leader in tomorrow's cryptocurrency world.
CRYPTO: SHIB
Key Data Points
There is some good news, though. Shiba Inu is becoming a stronger player than it was a year ago. The crypto is developing its own metaverse. And it's already put up its first phase of land for sale -- more than 32,000 plots. Eventually, Shiba Inu aims to sell more than 100,000 plots and fully build up this virtual presence.
Shiba Inu also is in the testing phase with its game Shiba Eternity. It runs in two versions -- as a standard mobile game and as a game on the blockchain.
At the same time, Shiba Inu is working on another project that could eliminate one of its biggest problems. That's the high cost and slow speed associated with operating on Ethereum. Shiba Inu's layer-2 solution -- Shibarium -- should do away with those challenges. Work on this is ongoing. Earlier, developers aimed to launch public beta testing in the third quarter but missed that goal.
A losing bet
In spite of these potential positive elements on the horizon, though, Shiba Inu has been a losing bet in recent times. About 77% of Shiba Inu holders are losing money on their holding right now, according to Into the Block data.
Of course, that could change. Progress on any of the projects I mentioned above could drive the price of Shiba Inu higher. It's possible a buy in 2023 -- or even today -- eventually will result in some gains.
So, considering all of these points, is Shiba Inu a buy, hold, or sell in 2023? When it comes to buying, my answer is clear. I wouldn't buy this highly risky crypto. It doesn't stand out from rivals. And other challenges like its enormous token supply will limit future growth.
The decision to hold or sell depends on your personal situation. For instance, if you own Shiba Inu and selling today would result in a loss, you may want to hang on to see if the catalysts mentioned above lift the value of your investment. Some investors who can accept the loss, though, may be better off selling and reinvesting in stronger assets that will compensate for the Shiba Inu loss over the long term.
Finally, investors who have made a profit from their Shiba Inu investment also should consider selling today. Even if catalysts offer Shiba Inu a boost, I'm not convinced gains will last. There are many other cryptocurrencies or stocks out there that offer a clearer path to wealth in the new year and beyond.
