Even though the Shiba Inu (SHIB -2.92%) token is down roughly 88% from its all-time high, the cryptocurrency is still up massively. The popular meme coin gained 18,600,000% from its low shortly after its launch in 2020.
With Shiba Inu currently trading at roughly $0.00001 per token, the coin could reach a price of $0.01 per token if it were to rise 99,000%. If the cryptocurrency were to deliver that kind of performance, investors who purchased $1,000 worth of the token would see their position grow to be worth more than $990,000.
But could Shiba Inu really hit a price of $0.01 per token?
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Barking up the wrong tree
Posting a gain of 99,000% might not seem like an impossible proposition, given that Shiba Inu has fallen dramatically from its high and has a record of posting much bigger percentage gains in the past. But it's important to keep in mind that relative growth becomes much harder to deliver with larger numbers.
Currently, Shiba Inu has a market capitalization of roughly $6.2 billion and a circulating supply of roughly 589 trillion tokens. At a price of $0.01 per token, the cryptocurrency would have a market capitalization of $5.89 trillion.
For comparison, Bitcoin had a market capitalization of $1.28 trillion at its valuation peak. At a price of $0.01 per token, Shiba Inu's market cap would need to be 4.6 times the peak valuation of Bitcoin, the token that has always had the largest market cap in the cryptocurrency universe.
Hitting a price of a penny per token is an incredibly tall order for Shiba Inu and would require an almost impossible performance. But it is possible that the token could climb higher this year and beyond.
What could send Shiba Inu higher in 2024?
While the Shiba Inu has plunged precipitously from its high and has fallen in the crypto-market-cap rankings, the fact that the price didn't evaporate amid the depths of cryptocurrency winter in 2022 suggests that crypto has some staying power. If last year's rally in the broader crypto market continues in 2024, it's reasonable to expect that Shiba Inu could record some solid gains. There's at least one good reason to think that could happen.
Many investors and analysts now expect that the Federal Reserve will begin cutting interest rates in 2024. Doing so would make borrowing money less expensive and would be a major catalyst for cryptocurrencies, growth stocks, and other speculative investments.
It's also possible that projects including the Shibarium Layer-2 solution for transaction processing and SHIB: The Metaverse -- a virtual world where participants can buy real estate or play games -- could increase adoption of the Shiba Inu token. As it stands right now, these projects seem unlikely to provide major positive pricing catalysts for the token in 2024, but there is a chance they will go on to exceed expectations and drive bullish sentiment for the cryptocurrency.
Is Shiba Inu a smart buy?
Shiba Inu is a cryptocurrencythat operates on the Ethereum blockchain. Outside of being a speculative asset and with almost no use as a currency, there isn't much to distinguish it from many other cryptos. There are already more than 23,000 cryptocurrencies for investors to choose from, and the ease of launching new tokens means that new digital assets are joining the fray all the time.
It's fairly easy to create a cryptocurrency that solely functions as a currency or a speculative asset these days. Building a network that attracts an active community and continues to evolve is much more difficult. There are signs that the Shiba Inu team is making efforts to support the long-term viability of the token, but its status as a well-known meme coin will probably remain its biggest competitive advantage for the foreseeable future.
There's no denying that Shiba Inu has put up stellar returns since its inception, but I generally think that cryptocurrencies that are tied to useful applications have better chances of long-term success. That doesn't mean the coin isn't capable of delivering significant gains from current pricing levels, but investors should understand that it is a very speculative, high-risk investment.
