Launched in 2020, Shiba Inu (SHIB 6.53%) was created to be an alternative to its dog-inspired predecessor, Dogecoin. Despite taking its owners on a wildly volatile journey in the past four years, this token has generated a monster total return anyone would be elated by. Today, it's the 13th most valuable blockchain in the world.
As of this writing, this meme cryptocurrency trades at $0.00001432 per token. But can it soar nearly 7,000,000% to one day reach $0.01? Here's what investors need to know about Shiba Inu.
Shiba Inu's bullish case
Shiba Inu was built to have more functionality than Dogecoin, which is its own separate blockchain. That's why Shiba Inu was made to be compatible with the Ethereum ecosystem. This expands its usefulness, particularly when it comes to the vast array of decentralized applications.
Additionally, Shiba Inu is run on a proof-of-stake consensus mechanism. This is viewed favorably by the crypto community because it's an energy-efficient way to process transactions on the blockchain.
Shibarium, a Layer 2 scaling solution that's meant to speed up transaction processing times and lower fees, was recently launched. There's also a metaverse where users can buy plots of virtual land. The overarching objective is to attract more users and developers to Shiba Inu.
Lacking competitive strengths
The fact that Shiba Inu currently trades 84% off its all-time high, a milestone reached during the bull market of 2021, might be a clear indicator that the market is slowly losing interest in this cryptocurrency. At the end of the day, the utility that a blockchain network can provide will probably ultimately be the driving force for its long-term value.
Here's where Shiba Inu seriously lacks when compared to other digital assets. For starters, it doesn't even make the list of the top 100 cryptos in terms of full-time developer activity. This doesn't bode well for its future, as it shows there aren't many experts working on making advancements to the Shiba Inu protocol.
Investors should choose more promising digital assets to buy. Ethereum has the most developers focused on it, and it seems to have more potential as an eventual winner in the crypto industry over the next decade, especially after it's able to successfully implement all the planned technical upgrades.
Then there's Bitcoin, the world's first and most valuable cryptocurrency. Bitcoin seems boring at first glance, but its fixed supply cap and decentralized structure aim to create a better global monetary network. And given that it's now a mainstream financial asset with the introduction of spot ETF products, it's hard not to be bullish.
Temper expectations
There are currently 589 trillion Shiba Inu tokens in circulation. That's a huge sum. If the token's price did reach $0.01 one day, it would imply that the total network would be worth a jaw-dropping $5.89 trillion. To be clear, I don't think this is likely to ever happen.
The crypto industry currently carries a market cap of under $2.2 trillion. Some of the most dominant businesses on Earth that sell hugely popular products and services, like Apple, Nvidia, and Microsoft, are all worth less than Shiba Inu's hypothetical market cap at $0.01 per token. This just seems like an outright unrealistic outcome.
Based on the lack of any meaningful utility, as well as a low chance of long-term success, I don't think Shiba Inu is a smart crypto to buy right now.
