With its price up 201% since the start of 2023, Bitcoin has been on a tear thanks to some positive developments. It's understandable, however, if some investors think they missed the boat on the world's top cryptocurrency.
This will induce some to turn to more speculative tokens, like Shiba Inu (SHIB -4.14%). The dog-themed crypto skyrocketed in 2021 and caught the attention of many. And bullish supporters are hoping a repeat performance is in the cards.
Here are three things you'll regret not knowing if you're thinking about buying this meme token right now.
Key features
Unlike its predecessor, Dogecoin, Shiba Inu was built on top of the Ethereum network. This makes the SHIB native token compatible with various decentralized applications and digital wallets, in theory increasing its utility. Moreover, this means Shiba Inu has functionality for smart contracts.
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Trying to propel the network forward, Shiba Inu developers recently launched a Layer-2 solution known as Shibarium. The hope is that this innovation can speed up transaction times and lower fees, making Shiba Inu a more popular choice for users to transact with.
The other major part of the development pipeline is the launch of Shib: The Metaverse. Users can already purchase land in this Shiba Inu virtual world.
Lacking adoption
Despite what appear to be some favorable attributes, Shiba Inu isn't finding a lot of success when it comes to adoption. According to cryptwerk.com, the token is accepted by just 915 merchants as a method of payment. Of course, it's not hard to understand why any business would hesitate to accept Shiba Inu. Extreme price volatility and security risks come to mind.
But beyond that, Shiba Inu just isn't catching on in other areas either. Its lack of attractiveness for developers is probably the main reason why. In terms of how many active developers are working on projects using it, Shiba Inu doesn't crack the top 100 cryptocurrencies, according to venture firm Electric Capital. Without buy-in from developers, whose sole focus is to advance the network, the chances of Shiba Inu boosting its utility are slim.
This situation makes it strikingly clear the advantages that cryptocurrencies like Ethereum, Cardano, and Solana have. They all possess unique characteristics that at least give them a chance to be long-term winners in this space. Users and developers have more reason to make use of them, creating an uphill battle for Shiba Inu's viability.
Diminishing interest
Though it's still one of the best-performing digital assets since its public launch in August 2020, Shiba Inu is currently 89% below its peak price. Last year, the token rose a little over 30% in value, but this gain lagged the overall crypto market, which roughly doubled. And Shiba Inu seriously underperformed both Bitcoin and Ethereum.
I believe this points to speculators' waning interest in Shiba Inu. It's difficult to be optimistic about the token's ability to generate monster returns going forward when it couldn't even outperform the crypto industry average during what was a terrific year for digital assets. Consequently, there's probably zero chance Shiba Inu will ever get close to its all-time high ever again.
Equipped with these facts about the Shiba Inu network's key features, its adoption trends, and recent price action, investors will be better positioned to decide for themselves if this is a cryptocurrency they want in their portfolios.
