You won't find many investments with more early success than Shiba Inu (SHIB -6.83%). During 2020 and 2021, it gained more than 17,000,000%. The lucky few who got in (and out) at the right time are set for life.
Since then, Shiba Inu has mostly lost value, outside of a few smaller bull runs. The current price is $0.000011 as of June 20, down 87% from the all-time high in 2021 and 45% on the year. At that price, $100 is enough to buy well over 8 million of the tokens.
Several popular cryptocurrencies have done well over the last year, including Bitcoin (up 59%), XRP (up 343%), and Cardano (up 57%). And investors are excited about the future, considering the Trump administration has been crypto-friendly so far. Could it be Shiba Inu's turn to go on a run? Anything's possible, but I would be cautious about investing in this meme coin.
Image source: Getty Images.
Limited uses, limited value
Meme coins normally aren't intended to solve real problems or create lasting value. People create them for fun or to hopefully strike it rich. That was the case with Shiba Inu, which started as a joke. It didn't have a white paper; it had a "woof paper" with quotes from Miyamoto Musashi, a 17th-century Japanese swordsman. The anonymous founder, Ryoshi, even sent about half of the total token supply to Ethereum (ETH -9.66%) co-founder Vitalik Buterin in 2021 as a publicity stunt.
From the beginning, Shiba Inu wasn't a serious project. It does have some use cases, in all fairness. The team behind it has built a Shiba Inu ecosystem with decentralized finance (DeFi) applications, including a decentralized exchange, ShibaSwap.
But hardly anyone is using this blockchain ecosystem. The total value locked (TVL) on Shibarium, Shiba Inu's blockchain, is $2 million as of June 20. TVL is the amount of funds deposited onto a blockchain, so it's a good measure of a blockchain's popularity. Ethereum, the current king of DeFi, has $62.6 billion in TVL. Shiba Inu doesn't even crack the top 100 cryptocurrencies by this metric.
Shiba Inu's lack of utility means there isn't much of a reason to buy it except in hopes that the price will go up.
Meme coins don't age well
It's rare to see meme coins come anywhere close to their initial success. The novelty simply wears off. People want to buy the next Shiba Inu or Dogecoin, not the old version that has already had its moment.
Shiba Inu appears to be at that stage. The number of daily active addresses has been declining and is in the 3,000 to 4,000 range this month, according to Santiment. In other words, a few thousand wallets per day are using Shiba Inu. At its peak in 2021, it had over 60,000 daily active addresses.
The humorous nature of meme coins can also impede growth. Some retail investors may put in $10 to $100 for fun, but few will risk a sizable investment, and institutional money probably isn't going to start pouring into Shiba Inu.
A price prediction for Shiba Inu
My prediction for Shiba Inu is that it will lose 25% to 50% of its value over the next five years. That would put its price between $0.000006 and $0.000009.
Shiba Inu is highly volatile, and it could have periods where it does well. I don't think it will have a straight, steady decline. It will have some ups and some downs, but ultimately be a losing investment for those who buy and hold.
This is still one of the largest cryptocurrencies in the world, and it has passionate supporters. It probably won't fall off the map completely. But as the highs get further in the rearview mirror, fewer and fewer people will buy Shiba Inu.
