Things are starting to look up for Shiba Inu (SHIB 1.21%), which is still one of the most popular meme coins in the world. Shiba Inu is up 25% for the year, but the best may be yet to come. The cryptocurrency is about to launch a new tech upgrade known as Shibarium that has the potential to significantly boost the utility of its blockchain.
Some Shiba Inu investors, as might be expected, predict that the launch of Shibarium will send the meme coin skyrocketing. In fact, there are some very aggressive estimates out there for what the tech upgrade could do for the price of Shiba Inu. Are they right, or is this just more hype and speculation?
Shibarium
The big question is whether Shibarium can solve Shiba Inu's utility problem. Simply stated, there's not a lot that you can do with Shiba Inu right now, other than hoard it and hope that it transforms you into a crypto millionaire one day. Yes, some merchants accept Shiba Inu as a form of payment, but many of these options have limited appeal.
Image source: Getty Images.
That's where Shibarium comes into the picture. This is a Layer 2 scaling solution designed for the Shiba Inu blockchain. In layperson's terms, this means that it helps Shiba Inu run faster, cheaper, and more efficiently than in the past. But it also means enabling much more functionality for the Shiba Inu blockchain. In a best-case scenario, Shibarium could lead to new gaming and metaverse experiences, new decentralized finance (DeFi) applications, and thriving marketplaces for non-fungible tokens (NFTs).
Cryptocurrency giant Ethereum pioneered the idea of Layer 2 scaling solutions, and has had a lot of success with them, so this is actually a very proven concept. That's why there's so much excitement about Shibarium in the Shiba Inu community.
But the full impact of the Shibarium launch is still yet to be determined. After all, Shiba Inu's high-profile metaverse experience (known as SHIB: The Metaverse) has pretty much languished ever since it was introduced, and the official launch date keeps getting pushed back. And while Shiba Inu is touting the number of partners and vendors signing up to use the new Layer 2 scaling solution, all of the buzz that we've been hearing about Shibarium throughout the summer seems to me to be vastly overstating the actual adoption rate.
The hype around meme coins
And this is perhaps my biggest issue with Shiba Inu: There's simply too much hype and speculation, and not enough real, tangible results. As much as I want to believe in the appeal of Shibarium, it's hard to take the project seriously when Shiba Inu referred to the test version of this new blockchain project as "Puppynet."
Keep in mind that Shiba Inu is the meme coin that pioneered the use of marketing stunts to gain attention among investors. When it first launched, Shiba Inu's developers famously "donated" 500 trillion (yes, trillion!) coins to legendary Ethereum founder Vitalik Buterin, in the hopes that he would help to promote the coin. He didn't. In fact, he made a very public act of burning 90% of these tokens (rendering them worthless) and giving the other 10% to charity.
How reasonable is a $1 price target?
Certainly, Shiba Inu continues to distance itself from Dogecoin as the superior meme coin, primarily based on the amount of new utility it is trying to create. However, there's a long way to go before it can be viewed as a good investment. There's still too much hype and speculation, and still too many concerns about the underlying fundamentals.
Can Shiba Inu skyrocket to the $1 mark? It's unlikely, to say the least. Shiba Inu still has a massive coin supply of 589 trillion tokens, so getting to the $1 mark would imply a total market capitalization of $589 trillion. By way of comparison, that's nearly 200 times the market cap of Apple these days. Most likely, Shiba Inu will see some kind of short-term bounce from the launch of Shibarium, but I'm still bearish on this meme coin as a long-term investment.
