Bitcoin has set record highs this year and shows no signs of slowing down. And everyone's favorite meme token, Shiba Inu (SHIB -4.24%), has not just come along for the ride but has been leading the charge. Up a mammoth 240%, Shiba hasn't been rising this quickly since 2021, when meme stocks were taking off in value. While it would still have an incredibly long way to go, is there a chance the coin could hit $0.01 this year, given all the excitement?
The last time Shiba Inu was at these levels, the coin was going in the opposite direction
Early 2022 was the last time Shiba Inu's price was around $0.000033, about the same as now. At the time, the crypto markets were in the midst of a tailspin as investors and speculators were selling risky assets.
This time around, however, there's much more excitement surrounding crypto as volumes are growing after several spot Bitcoin exchange-traded funds (ETFs) were approved by regulators earlier this year. And there's hope that there could be other similar ETFs coming for other coins, including Ethereum. An approval for an Ethereum spot ETF could come as early as May. If that happens, excitement may grow further that other coins and tokens, including Shiba Inu, could get their own spot ETFs.
Why the hype may not be at a fever pitch just yet
Although Shiba Inu's price has been taking off this year, this comes even as search queries remain modest compared to 2021 levels. According to Alphabet's Google Trends data, globally, searches for 'Shiba Inu coin' are just 12% of what they were back at the peak a few years ago. But that is higher than in previous weeks -- online traffic and interest have been picking up steam.
This means there could still be more room for the meme token to rise in the lead-up to the eventual decision on the Ethereum spot ETF. Depending on how that goes, it could either deflate Shiba Inu's price or potentially send it even higher. To reach $0.01, however, Shiba Inu's price would need to increase more than 300-fold to reach those levels and in the process become much more valuable ($5.8 trillion) than Bitcoin is today ($1.4 trillion); to say that would even be a long shot would be an understatement. The token could rise further, but investors shouldn't expect miracles.
Where there's hype, there's also serious risk for investors
As tempting as it may be for crypto investors to jump aboard the Shiba Inu bandwagon, it's important not to forget that it was just a few years ago when most cryptos plummeted in value, leaving investors with significant losses. Speculation continues to fuel much of the hype surrounding Shiba Inu and other cryptos, which can make it incredibly risky for investors to buy into this rally, as there's no telling how long it may last.
Investing based on internet hype and the popularity of one crypto versus another, without the basis of any fundamental reason for it, only the expectation that more people might buy it, is a risky proposition, and one which could leave you with some significant losses. Investors buying based on that premise are buying on the assumptions of the greater fool theory, which could have disastrous consequences.
Rather than buying Shiba Inu, investors are likely better off pursuing safer growth stocks that can give you the opportunity to achieve significant returns without taking on extremely high levels of risk, as is the case with buying meme tokens.
