Last year was brutal for the cryptocurrency market, as the entire industry lost roughly two-thirds of its value. Stubbornly high inflation that proved not to be transitory forced the Federal Reserve to tighten its monetary policy and aggressively hike interest rates. This resulted in investors moving away from riskier assets, a category cryptocurrencies no doubt belong in.
But things have taken a positive turn this year. Bitcoin and Ethereum are up 41% and 36%, respectively, through the first two months this year. And even a more speculative token, Shiba Inu (SHIB 0.52%), has seen its price soar 50% in 2023.
Can this positive momentum propel Shiba Inu to $0.01 per token? Let's take a closer look at what investors should know.
A possible monster return
Based on its current price of $0.000012, Shiba Inu would need to rise a ridiculous 83,000% to hit the $0.01 mark. But this wouldn't exactly be the first time Shiba Inu quickly appreciated in value. From the start of 2021 to Oct. 28 that year, Shiba Inu jumped an eye-watering 50,000,000%, riding the broader meme-stock craze to new heights. But it is down 86% from that peak price.
Shiba Inu's all-time high price was $0.00008845, which was reached in late October 2021. Therefore, reaching $0.01 would be a new record for the token. Because there are currently 549 trillion tokens outstanding, reaching $0.01 means the entire network's value would be about $5.5 trillion.
That would be a higher value than the market capitalizations of big tech businesses like Apple, Microsoft, Amazon, and Meta Platforms combined. These companies generated total sales of $1.2 trillion in their trailing-12-month periods.
Consequently, unless Shiba Inu somehow gains billions of users and actually finds ways to provide real-world utility, I don't see $0.01 as a probable scenario.
Invest your money elsewhere
Many speculators are probably hoping for the token to skyrocket, so they can get rich quickly. After all, this is the general characterization of crypto market participants, wishing that their holdings go "to the moon." But I don't see it ever reaching $0.01.
For starters, Shiba Inu lacks differentiation among the more than 22,000 cryptocurrencies out there. It was built to provide more functionality than its dog-inspired cousin, Dogecoin, by being compatible with the broader Ethereum network. However, I just don't see why users or developers would flock to Shiba Inu when there are more promising and technically sound projects available, like Ethereum, Cardano, and Solana. In fact, there are only over 700 merchants that accept Shiba Inu as a method of payment right now.
For what it's worth, Shiba Inu isn't simply resting on its laurels. There are some key developments in the works. Shibarium is a Layer 2 solution that is trying to reduce network traffic and lower transaction fees. And this will hopefully make the blockchain a bigger player when it comes to metaverse applications and non-fungible tokens.
To be fair, Shiba Inu is currently the 14th most valuable crypto network, so it has a strong following of supporters. But it's clear that this token's price movements are driven entirely by hype from its community. Trying to figure out when it will fall in and out of favor with the market is a losing game that will certainly hurt your portfolio and your peace of mind. And this just isn't a good way to invest your hard-earned capital.
If you're waiting for Shiba Inu to skyrocket to one penny, you could be waiting for the rest of your life. This token will never reach that mark. There are better places to park your money.
