As of April 5, the Nasdaq Composite Index has soared 43% in 2024. This performance has been lifted by strong gains for dominant tech companies.

But the cryptocurrency market has said, "Not so fast." From the beginning of last year to today, the digital asset industry's entire value has more than tripled. Investors are flocking to the riskiest asset class in dramatic fashion.

It's no surprise that some of the most speculative tokens are experiencing strong momentum, particularly more recently. For example, Shiba Inu (SHIB -5.16%) has skyrocketed roughly 150% in the past few weeks. Maybe there's growing interest that more spot ETFs will be approved following Bitcoin.

Even after its run-up, perhaps some daring investors are ready to buy Shiba Inu on the dip while it's still significantly below $0.01. Is that a smart idea?

What's the point?

At The Motley Fool, we urge investors to adopt a long-term mentality. That means thinking in terms of the next five years, and ideally more. This makes worrying about the next few months or quarters seem silly.

While it's important to think this way when it comes to stocks, it's also critical to adopt this mindset with cryptocurrencies. It's so easy to get caught up in short-term price movements, especially when they're as wild as what can happen with digital tokens. But what matters at the end of the day are the fundamentals.

With this mental framework, investors looking to buy Shiba Inu should start to ask if there's really any point to this cryptocurrency. To be fair, I'll give the founders credit for creating a $16 billion blockchain network in less than four years. Given that the crypto industry values having a strong community of supporters, viewed in this light, Shiba Inu might be a smashing success for some.

But going back to that long-term mindset, investors need to wonder where Shiba Inu could be a decade from now. I'm a firm believer that for any cryptocurrency to survive, it will eventually need to figure out how to raise utility and gain broad adoption.

By being built on top of the Ethereum network, Shiba Inu was created differently from its inspiration, Dogecoin, which is its own blockchain. This makes Shiba Inu's native token, SHIB, compatible with the vast ecosystem of Ethereum decentralized applications out there.

However, I suspect Shiba Inu isn't used much for its intended purpose, like to purchase non-fungible tokens, use decentralized finance protocols, or buy virtual land in the metaverse. It doesn't even crack the top 100 cryptocurrencies when it comes to developer activity. That doesn't bode well for its future.

Setting expectations

Shiba Inu currently trades 70% below its peak price. The all-time high was during the raging bull market of 2021. I'm not sure this type of run will happen again.

Warren Buffett once said that investors should be comfortable buying a stock if the market closed for the next five years. Applying this time of thinking to cryptocurrencies might seem crazy given how volatile the industry is and how much change happens, but it's a valuable perspective to have. I don't believe anyone could view an investment in Shiba Inu in this light. Five years from now, there's a significant probability that its value will approach zero.

The only reason to buy it is if you think you can correctly time the market, with the hope of buying at the lows and selling after massive bull runs. But no one can do this successfully on a consistent basis.

Even with Shiba Inu trading well below a penny, it's best not to park your hard-earned savings in it.