This year has been wonderful for the stock market, as the S&P 500 and the Nasdaq Composite Index have risen by 15% and 19%, respectively (as of June 27). But the cryptocurrency market has fared even better. The total market cap of digital assets is $2.3 trillion, up 35% compared to the start of the year.
One of the most speculative tokens, Shiba Inu (SHIB 1.80%), has benefited greatly from this bullish backdrop. The dog-theme meme coin has soared 63% in 2024.
But Shiba Inu remains 80% off its peak price. Does this mean the cryptocurrency is a smart buy while it trades for less than one penny?
All about hype
As of this writing, Shiba Inu is the 13th most valuable blockchain network on Earth, with a market value of $10.3 billion. This has been achieved in just four years, as the token was launched in August 2020.
You'd think that this means Shiba Inu has found broad adoption in terms of finding real-world utility. But I don't believe this is the case. It isn't used much as a tool for completing transactions.
To be fair, though, Shiba Inu's founders wanted this network to have greater functionality than its inspiration, Dogecoin. That's why Shiba Inu is built on top of the Ethereum blockchain, which makes it compatible with a vast array of decentralized applications.
However, it's still safe to assume that Shiba Inu lacks utility. Crypto enthusiasts can use more popular tokens, like Ethereum, Cardano, or Solana, for example, that have much deeper developer networks and better services.
The only reason that I can think of as to why someone would even consider buying Shiba Inu is because they want to speculative on its price in the short term. But what we can observe from its history is that price movements are entirely driven by various hype cycles. This cannot be predicted ahead of time.
For example, Shiba Inu really took off during a week-long stretch in late February and early March. But the token has cratered since hitting that 2024 peak. This is the reality of owning such a volatile asset.
CRYPTO: SHIB
Key Data Points
Better options
Shiba Inu lacks a true competitive edge when compared to the virtually unlimited number of cryptocurrencies out there. Consequently, there are more promising ones to buy instead.
I already brought up Ethereum earlier. At the end of 2023, this network had 2,392 full-time developers working on it, more than any other blockchain out there. Its hope is to be the world's decentralized computer. And while this is still a long way off, it has a much higher likelihood of existing 10 years from now than does Shiba Inu.
In my opinion, Bitcoin is perhaps the top cryptocurrency that investors can add to their portfolios. It's completely decentralized. And even more importantly, it has a fixed supply cap of 21 million coins, making it somewhat of a digital gold.
This is in stark contrast to the setup of Shiba Inu, which has a whopping 589 trillion coins in circulation. No wonder its current price of $0.00001746 is so nominally low.
Investors looking to score potentially huge returns might also be interested in buying growth tech stocks. These appear to be a much safer place to park your money than Shiba Inu. That's because these businesses sell products and services that customers actually pay for, with the possibility of higher revenue being generated in the long run.
So, while Shiba Inu trades well below one penny right now, investors should avoid it like the plague.
