As a largely unregulated, rapidly evolving, and high-potential asset class, the cryptocurrency industry certainly brings in market participants looking for quick profits. Coinmarketcap.com keeps track of a whopping 31 million different digital assets. I'd say that most of these serve no purpose and solve no problem.
You might first think that Shiba Inu (SHIB +0.26%) falls into this category. However, the meme token's price has skyrocketed since its launch in August 2020. And its market cap is a notable $4.6 billion.
With a time horizon that spans the next 10 years, is this crypto a buy, hold, or an asset that's best avoided?
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Shiba Inu's community is what matters
Shiba Inu has remained somewhat relevant over the years, even though the overall industry has evolved. Known as the ShibArmy, the token's strong community of supporters probably means that there is a floor that will keep Shiba Inu's price from going to zero. Just for the sake of being fans of the project, these people might choose to never sell.
However, critics will argue that the community is dwindling. After all, Shiba Inu trades 91% below its peak (as of Jan. 22). This has occurred despite the overall cryptocurrency market holding up well. Maybe it's safe to assume that Shiba Inu will never return to its former glory.
Therefore, long-term investors are better off avoiding this crypto altogether. Look at Shiba Inu's price chart, and it's obvious that it's heavily influenced by unpredictable hype cycles that have nothing to do with real fundamentals. This is an arena for traders that gravitate toward extreme levels of volatility.
CRYPTO: SHIB
Key Data Points
Betting on a steady decline
On a positive note, Shiba Inu has Shibarium, a Layer-2 scaling solution designed to lower transaction costs and boost speed. There's a decentralized exchange known as ShibaSwap. And users can interact with a dedicated metaverse.
But with very few developers working on the network, the chances are slim that Shiba Inu can introduce features that support greater utility and token demand. These developers are better suited working on more promising cryptos that have a brighter future.
I wouldn't be surprised at all if Shiba Inu's price is much lower 10 years from now. It has struggled to drive excitement from investors during a period of time when risk assets have performed well. Yes, there could be another monster bull market that leads to irrational investor behavior and tons of capital flowing to Shiba Inu. But that would be short-lived, and the ensuing fall would be precipitous.
Investors shouldn't own Shiba Inu for a single day, let alone 10 years.
