Even though Shiba Inu (SHIB -4.92%) has likely been one of the most volatile cryptocurrencies out there, it has still been a big winner for those daring speculators who put their money behind it. Although the token is 89% below its peak price, it has crushed the stock market since its launch back in 2020.
Some fervent Shiba Inu bulls probably have their sights set on a much higher price target, though.
Can this dog-inspired cryptocurrency one day reach $0.01? This would translate to a monster gain of more than 1,000-fold from today's price. Let's dive in and find out if this is a possibility.
Overview of Shiba Inu
Shiba Inu was created to be more functional than its dog-themed rival, Dogecoin, which is its own blockchain. Shiba Inu, by contrast, was built on top of the Ethereum network. Because of this design decision, Shiba Inu works with smart contracts and decentralized applications.
People can use Shiba Inu's token to send or receive payments to others. And perhaps more meaningful, the token can be used to pay for things at select merchants. But according to cryptwerk.com, only 792 businesses accept payment with Shiba Inu, so it has barely made any headway in this area.
Developers recently launched Shibarium, which is a Layer-2 scaling solution that is meant to improve transaction speeds and lower fees for users. There has been heightened excitement around this update. And it could propel Shiba Inu's adoption in terms of non-fungible tokens or the metaverse. At least that's the hope of the network's supporters.
Despite the aims to raise the utility of Shiba Inu, it's worth mentioning that this token has really only been used as a tool for financial speculation. This is the case with all cryptocurrencies out there, including Bitcoin and Ethereum.
Missing the rally
It's disheartening for Shiba Inu believers to see that the token hasn't performed that well in 2023, rising just 20% (as of Dec. 12). The overall crypto market, on the other hand, has been a huge winner, going from $800 billion at the start of the year to almost $1.6 trillion today.
Moreover, both Bitcoin and Ethereum, as well as some of the largest tech stocks, have had wonderful runs this year.
Amid a resurgence in investor optimism and a risk-seeking attitude, it makes you wonder why Shiba Inu hasn't participated more in the stock and crypto rallies in 2023. If the token can't rise in this environment, what will it take for Shiba Inu to grow?
Avoid this token
Now that readers have a better understanding of Shiba Inu and its recent price performance, it's time to think critically about the possibility of the token soaring more than 1,000-fold and reaching $0.01.
To be clear, I don't think this is a possibility. And I wouldn't bet any money on this outcome happening.
Based on Shiba Inu's current token supply of 589 trillion, at a price of $0.01 per token, the total market cap would be roughly $5.9 trillion. It's wild to believe that a token with virtually no real-world utility can command this type of valuation.
Based on that gargantuan figure, Shiba Inu would be worth more than Apple, maybe the most successful business of all time based on its market valuation of about $3 trillion. This tech giant is a cultural icon with a powerful brand that sells incredibly popular hardware and software products. There's no rational way to believe that Shiba Inu is worth double that of an enterprise like this.
It's best not to get sucked into the hype and the allure of financial speculation. Investors should avoid this crypto like the plague.
