Since last Friday, the price of meme token Shiba Inu (SHIB +0.63%) traded nearly 10% higher, as of 11:48 a.m. ET Thursday. There's no obvious reason for the move, but a few things could explain it.
A crypto bounce
The broader crypto sector is enjoying a nice week of gains. The price of Bitcoin, the world's largest cryptocurrency, hit a new all-time high above $112,000 per token.
Image source: Getty Images.
While Shiba Inu has struggled this year, it's historically moved with the broader crypto market, but usually with more volatility. This year has been more of a mixed bag, with tokens like Bitcoin flying, but other tokens like Ethereum down about 17% this year. Shiba Inu is an ERC-20 token, meaning it was built on Ethereum's network.
CRYPTO: SHIB
Key Data Points
Cryptocurrencies also may be rising this week in anticipation of the so-called "Crypto Week," which is being hosted by the U.S. House of Representatives starting on July 14. Next week, the House will take up three large crypto bills, including the Clarity Act, which would create a regulatory foundation for cryptocurrencies; the Genius stablecoin bill; and the Anti CBDC Surveillance State Act, which would bar the Federal Reserve from creating and issuing its own digital currency.
Should you buy Shiba Inu?
Since launching in 2020, Shiba Inu has experienced immense success and is now the 19th-largest cryptocurrency in the world, with a roughly $7.3 billion market cap. Shiba Inu has always thrived due to virality and the powerful community it has built on social media.
The creation of the Shibarium Layer-2 solution on Ethereum's network to ease congestion and lower gas fees gives the token more legitimacy, but I still don't see a great use case for Shiba Inu or any fundamental advantage. The token remains volatile, and I'd recommend steering clear for now.
