Shiba Inu (SHIB 6.53%) opened in 2021 at a price of $0.0000000000773 per token. By the end of that year, it reached $0.000035, which was a mind-boggling gain of 45,278,000%.
That would have been enough to turn a perfectly timed investment of $1,000 into $452 million. However, it's unlikely that investors could have bought $1,000 worth of Shiba Inu tokens at the opening price in 2021, because trading volume was extremely thin. With that said, an investment of just $3 would have made you a millionaire!
Shiba Inu has since plunged 73% from its all-time high. It has recovered some ground recently as sentiment improves across the crypto landscape, but could $1,000 invested today eventually make you a millionaire?
The Shiba Inu community is trying to unlock more value
The primary challenge for Shiba Inu (and most cryptocurrencies, including Bitcoin) is that it has failed to find a use case beyond serving as a vehicle for speculation. In order for a currency to maintain its value, consumers and businesses need to have faith in it as a means for transacting, otherwise there is no point in owning it.
Unfortunately, a currency that surges in value by millions of percentage points only to lose most of that value would make cash flow management a nightmare for any business. Therefore, it's no surprise that only 940 merchants around the world accept Shiba Inu tokens as payment for goods and services (according to Cryptwerk).
However, developers are trying to unlock more value for token holders. They launched Shibarium last year, a Layer 2 blockchain solution designed to speed up transactions and reduce costs. This solves for some of the inefficiencies in the legacy Ethereum network upon which Shiba Inu was built. Theoretically, it should make the tokens more attractive as a means of transacting in digital goods like non-fungible tokens (NFTs).
Developers also created a digital, app-based card game called Shiba Eternity in 2022 to attract people to the Shiba Inu ecosystem, and they continue to work on a metaverse in which tokens will have some real utility. However, progress appears to have stalled in the virtual world, as it failed to open last year as expected.
Image source: Getty Images.
Turning $1,000 into $1 million might be a challenge
Investing $1,000 in Shiba Inu at the current price of $0.0000242 would net you 41.3 million tokens. Simple math suggests those tokens would have to trade at $0.024 each for your position to be worth $1 million. In other words, Shiba Inu would have to deliver a gain of 99,900% from here.
Is that realistic? Based on Shiba Inu's current price and its circulating supply of 589.3 trillion tokens, it has a market capitalization of $14.3 billion. A gain of 99,900% would propel that market cap to a whopping $14 trillion.
In other words, Shiba Inu would be more than four times as valuable as Microsoft, which is the world's largest company. It would also be roughly half as valuable as the entire U.S. economy, which generated $28.2 trillion in gross domestic product (GDP) over the past 12 months.
Personally, I don't think that is within the realm of possibility given some of the issues I highlighted earlier, especially the token's sheer lack of adoption. In reality, it's nearly impossible to place a fair value on a speculative asset like Shiba Inu. Unlike a company, it doesn't generate revenue or earnings, which could otherwise be used to assess its worth. Instead, its price is set by whatever the next person is willing to pay.
Therefore, it's unlikely that investing $1,000 in Shiba Inu will turn you into a millionaire. In fact, you might be better off investing that money in the stock market instead.
