The Shiba Inu (SHIB -3.12%) cryptocurrency, once a market darling, is now simmering on a lower flame. Investors, eyeing price targets from $0.01 to a lofty dollar per token, are in a quandary as the current price hovers around one-thousandth of a penny.
As the market cap has shrunk from its $41.1 billion at the October 2021 zenith to $6.2 billion today, the pivotal question emerges: Cling to Shiba Inu with diamond hands in hopes of a miraculous turnaround, or release this whimsical crypto asset into the wild?
Let's just put it all on the table. I think it's a great idea to sell Shiba Inu right now, and here's why.
Beyond the hype: Shiba Inu's fundamentals
It's true that Shiba Inu has skyrocketed in the past. However, past returns are not a guarantee of future results. Sudden price spikes are often followed by equally dramatic drops. If the bulls were on the right track in the first place, the stock chart may climb back up over time and maybe even eclipse that short-lived glory in the end. But the bears tend to win out in the long run, leaving the former market darling down in the dumps.
I'm not kidding about the bearish winning trend. A winning strategy in our Motley Fool CAPS system is to slap thumbs-down ratings on dozens or even hundreds of small-cap stocks of the risky and unprofitable kind. Three of the five highest-scoring players so far have done exactly this, earning player ratings of 99.99 or more on a platform where the max is 100 points. Simply put, betting against risky investments tends to be a winning tactic.
CAPS doesn't track cryptocurrencies (yet, anyway) but Shiba Inu would be a prime candidate for a bearish thumbs-down rating. The cryptocurrency doesn't serve any serious purpose other than digital payments, and even then, more robust digital payment networks such as Dash (DASH -1.87%) and Litecoin (LTC 1.67%) can serve the same purpose with additional benefits.
For example, Litecoin and Dash come with minimal transaction fees and their prices have been more stable than Shiba Inu's in recent years. And wherever you find it possible to pay with Shiba Inu, that's normally done through a third-party "crypto gateway" service that includes its support alongside dozens of other options. Again, it's not hard to find better payment-oriented cryptos.
Don't forget that Shiba Inu was originally created as a joke. The technology behind is is serious enough, based on the Ethereum (ETH -0.32%) smart contracts platform with several support tokens serving special purposes like governance and mining rewards. But it's really just a social experiment, trying out a community-driven spin on cryptocurrency management and leaning even harder into the adorable puppy mascot than Dogecoin (DOGE -3.17%) ever did.
Is it time to trim your Shiba Inu position? Image source: Getty Images.
The final verdict: Shiba Inu's investment potential
I'm not saying you need to slam that "sell" button on Shiba Inu right away and never look back. The community is low-key trying to build a serious business with the speed-boosting and cost-cutting Shibarium technology. If this network can shed its meme coin status and start winning developer interest, Shiba Inu might create some coinholder value over time.
But I wouldn't bet on it. There are too many Ethereum-compatible coins on the market to let this puppy sneak in and steal the proverbial Thanksgiving turkey. Web3 developers are better served by other speed-focused smart contract systems such as Solana (SOL -5.08%) or Avalanche (AVAX -3.37%) -- or even plain old Ethereum, which is upgrading its technical architecture in a multi-year process.
Shiba Inu may eventually find its niche. Still, the current landscape suggests a more cautious approach. Betting on a single, speculative asset like Shiba Inu carries significant risk, especially when compared to more established players in the rapidly evolving cryptocurrency sector. Shiba Inu is not likely to reach that utopian $1 price in the foreseeable future, and even the $0.01 target looks unreasonable.
This silly coin isn't going to the moon. So if you built your Shiba Inu at half of today's price, which was possible in June 2023 and the summer of 2022, I highly recommend cashing in those winnings and moving on to better long-term ideas.
