Everyone loves stories of people going from rags to riches, whether they're true or not. And, with the understanding that market history often does rhyme, many investors also love the idea of the future simply repeating the past in perfect form, and rewarding those who saw the signs first.
With that in mind, let's examine two popular cryptocurrencies, Shiba Inu (SHIB +1.11%) and TRON (TRX +0.92%), against the dream of becoming a millionaire with a small purchase. Both have helped investors to accomplish that very feat before -- but can either do it again?
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It will take a lot of growth
The bar to making someone into a millionaire with either of these two cryptocurrencies is higher than it looks.
Once an asset is already large, getting another multiple of 10 or 50 requires vast new demand or structural cash inflows that compound value for holders. In practice, that means broad, persistent use, and fees that are guaranteed to accrue to the native token via a specific mechanism in the protocol. Growing by a smaller degree is obviously easier, but without those huge multiplications of value, it's nearly impossible to turn a small starting investment into $1 million.
Today, TRON sits near the large-cap end of crypto with a market cap of about $32 billion, a size that makes the prospect of 50-fold increases extraordinarily hard to expect, absent a once-in-a-generation shift entirely in the asset's favor. Meanwhile, Shiba Inu's market cap is lower, at $7.1 billion -- which, while making the math slightly more favorable, is still a very long shot for experiencing the kind of growth needed.
CRYPTO: TRX
Key Data Points
So, while there isn't anything inherently impossible with the idea of getting wealthier from buying and holding these coins, it's best to let go of the idea of getting rich quick from either of them because it is almost certainly not going to happen. Nonetheless, one of these chains is still a better bet for being a wealth builder than the other, so let's continue and compare their features directly.
Where value actually accrues
On the utility front, TRON's investment thesis is that it's an efficient workhorse platform for moving Tether's dollar-pegged stablecoin USDT.
USDT issuance on TRON is the largest among major chains, and it's clear there is a real market for the cheap and fast money transfers that it and other stablecoins enable. TRON regularly posts millions of daily active addresses, putting it among the busiest public chains.
In other words, there are many users doing something that typically requires paying fees in TRX, the native token of the chain, which is what generates demand and increases the asset's price. And during the past 12 months, the chain earned $3.6 billion in fees, so the demand for its token is substantial.
On the other hand, Shiba Inu doesn't have any such fee-generating properties. It doesn't really have an investment thesis. What it does have is a widely recognized brand as a meme coin that once went to the moon in 2021. There currently isn't a way to monetize that brand directly for the benefit of holders, but some investors are hopeful that the macroeconomic stars will align once more, giving way to a hype or sentiment-driven run-up in the coin's value.
So, could TRON's fee-generating engine plus its stablecoin throughput plausibly compound value to deliver significant growth for investors, beyond what Shiba Inu can offer? Yes, because there's a high chance that sustained global stablecoin adoption keeps activity high on the chain.
Therefore, TRON is by far the more credible candidate to be a favorable investment for wealth-building. But, being credible is not the same as being a compelling opportunity. And, given the chain's shaky reputation as being a hub for illegal financial activity by criminals, terrorists, and groups facing international sanctions, it isn't a risk-free play by any means.
Thus, for long-term investors, that combination of factors makes the expected payoff a bit too thin relative to the risk. There are better opportunities out there, so go find them.
