Shiba Inu (SHIB -0.77%) crushed the market in 2021. The popular meme token soared a mind-boggling 45,000,000%. Investors started this year with optimism, hoping the cryptocurrency would add to its gains. But that didn't happen. Instead, like the general crypto market, Shiba Inu tumbled. In fact, it's heading for a 72% loss this year.

Now, looking ahead to 2023, investors may wonder if Shiba Inu will rebound. The cryptocurrency has a lot going on right now, after all. It's working on a scaling solution and a metaverse project. Does this mean you should invest in Shiba Inu in 2023 -- and bet on a year of gains?

The Shib Army's support

First of all, what spurred Shiba Inu's enormous increase a year ago? The support of its followers -- the Shib Army -- brought this crypto player to the forefront. And as Shiba Inu climbed, many investors piled in, driven by the fear of missing out.

All of the enthusiasm over Shiba Inu back then clearly looks overdone considering the crypto's profile. Shiba Inu is a token running on Ethereum. You can invest in Shiba Inu, stake your holdings, or use it for payment at a limited number of merchants. That doesn't set it apart from the thousands of other cryptocurrencies out there.

The good news for Shiba Inu holders -- or potential holders -- is this cryptocurrency is about to get better than ever before. It's already carving out its spot in the metaverse. Shiba Inu is launching its very own virtual world -- and this spring started to sell plots of land there. The goal is to sell more than 100,000 plots. Here, Shiba Inu fans can interact, experience the Shiba Inu world, and even earn rewards.

And maybe the most important change of all for Shiba Inu is the eventual launch of a scaling solution. It's called Shibarium and developers are working on it right now. Shibarium is a Layer 2 solution that will eliminate two very important problems right now: slow speed and high transaction fees.

The idea is to make transactions quick and cheap. And that should attract more and more users and investors to Shiba Inu. Shibarium also will include a burn mechanism. The goal of this is to reduce token supply and therefore increase the value of Shiba Inu.

It's not yet known when Shibarium will launch. This fall, developers said on social media that an update is coming soon, though.

Short-term gains

All of this sounds positive. And progress in the metaverse and Shibarium could spur some short-term gains. So, should you invest in Shiba Inu in 2023? Not necessarily. Even with these developments, Shiba Inu still doesn't stand out among the other cryptocurrencies out there.

Many rivals are already way ahead of Shiba Inu in certain areas. For instance, The Sandbox already has sold land and has a lot going on in its metaverse -- including parties with rapper Snoop Dogg.

Shiba Inu also has another big problem. And that's the number of tokens in circulation. They total more than 549 trillion. Even burning efforts aren't enough to lift the value of Shiba Inu from a fraction of a cent to the level of $1. This seriously limits Shiba Inu's potential as a crypto to invest in for the long term.

All of this means Shiba Inu comes with a lot of risk. And not many elements that could lead to rewards over time. That's why, in 2023, you're better off considering stronger cryptocurrency players with clearer future prospects.