The question of how high one of the most popular cryptocurrencies, Shiba Inu (SHIB -0.87%), can fly is undoubtedly on the minds of many investors. After all, this digital asset has seen one of the most incredible price appreciations in short order in recent history. The token's multimillion-percent gains since inception have clearly been taken seriously by traders and speculators.
Now, with Shiba Inu's valuation hovering around $7.5 billion at the time of writing, the question is, how much higher can this token surge? I guess anything is possible in a market where valuations don't matter.
However, as we've seen with last year's marked sell-off in most risky assets, investors care about valuations more than ever. Thus, it's difficult to pinpoint exactly where this meme token will end the year.
Here's where I think Shiba Inu could be headed in 2023 and the key drivers to watch this year.
What's Shiba Inu all about?
Shiba Inu is a decentralized blockchain-based cryptocurrency that was created in August 2020. Since then, Shiba Inu has seen incredible growth driven by a strong and vibrant community and hopes of mass adoption, given this blockchain's relatively low cost, high liquidity, and easy access.
Shiba Inu was created as a humorous take on Dogecoin, using the same Shiba Inu dog mascot to generate interest. This approach has been successful, resulting in a market capitalization of approximately $7.5 billion for a dog-inspired cryptocurrency initially created, like Dogecoin, as a joke.
As an ERC-20 token on the Ethereum network, Shiba Inu does not have distinct technical or practical features. However, this may change with the introduction of Shibarium, a Layer 2 protocol that will function as Shiba Inu's own network on top of Ethereum.
In a recent show of generosity, Ethereum founder Vitalik Buterin donated over 50 trillion Shiba Inu tokens, worth about $1.14 billion, to the India COVID-Crypto Relief fund. By doing so, he showed his commitment to helping those in need and demonstrating that cryptocurrency is valuable and capable of positively impacting the world.
In addition to this donation, Buterin pledged to donate any remaining Shiba Inu tokens to charity for long-term projects that will benefit people worldwide. This act of kindness and generosity made a big impression on many in cryptocurrency and philanthropic communities.
The beginnings of Shiba Inu
The initial price performance of Shiba Inu has been exceptional, with its value increasing by 27,000% within the first few weeks of its launch. While this was a significant percentage gain, it is worth noting that the token's price has never surpassed 1/100 of one cent.
On Oct. 28, 2021, Shiba Inu saw peak exuberance take hold when this token rose to an all-time high of $0.000089. This came after SHIB had been listed on various exchanges and launched its own non-fungible Shiboshi NFT tokens.
As a result, SHIB's market capitalization also reached a record high of more than $36 billion. However, with a market capitalization of roughly $7.5 billion at the time of writing, this token's decline since October 2021 has been impressive.
Now, investors are looking forward to where this token could potentially head this year and beyond.
Predictions for Shiba Inu in 2023
Many investors remain convinced that Shiba Inu's valuation could still surge to a new all-time high. Anything is certainly possible, and there are other cryptocurrencies out there with valuations far in excess of $36 billion. Still, it's likely to be a difficult road to "killing another zero" in 2023.
I think it will take a serious catalyst to bring Shiba Inu above its previous high and toward the $0.0001 level. Indeed, we'd likely need to see the overall market surge alongside Shiba Inu, which would require a massive bull market rally in this speculative asset class. Given how hawkish the Federal Reserve has been of late, such a scenario may be wishful thinking.
Indeed, while Shiba Inu has seen some remarkable momentum recently, it remains to be seen if this momentum can continue throughout the year. I'm of the view that this is a token with a vibrant community, an intriguing growth roadmap, and a hype machine that's second to none in the crypto space. Thus, it's entirely possible SHIB could challenge its previous all-time high.
That said, I think it's more likely this token will stay near its current range this year. Investors appear to be digesting incoming macro data in a polarizing fashion. Thus, I think a tug-of-war in the crypto market is more likely than not this year, and I wouldn't be surprised if this translated into a relatively stable Shiba Inu valuation through the end of 2023.
