top partner

for CFD

Shiba Inu (CRYPTO: SHIB) attracted lots of attention during the cryptocurrency bull market of 2021, the year that the price of this meme token skyrocketed in value to reach its all-time high. That same year the stock market was also on an impressive run.

However, it’s been a different story in the past couple years. Unfavorable macro factors have helped drive down Shiba Inu‘s price 90% from that peak price. And this dog-themed meme token is up less than 9% this year, even with other top cryptocurrencies posting much bigger gains.

Should investors consider buying Shiba Inu while it’s still down? Let’s take a closer look.

Lagging the market

As of this writing, the crypto market is valued at $1.4 trillion, which is up 75% since the start of the year. This rise coincides with the gains of the broader equity market. After a tumultuous 2022 for investors, it appears as though risky assets are back in style.

Last year the Federal Reserve embarked on an aggressive rate-hiking plan, a policy move aimed at slowing accelerating inflation. As a result, investors had a more pessimistic outlook on things. But this year optimism is taking hold once again.

This is why it’s troubling to see that Shiba Inu hasn’t really participated in the rally. Bitcoin and Ethereum, the two most valuable cryptocurrencies on the planet, are up 120% and 65%, respectively, in 2023. Maybe this is a sign that the hype that once surrounded Shiba Inu has now completely faded.

Where’s the utility?

There’s no doubt that investors have been drawn to cryptocurrencies, Shiba Inu included, primarily as a tool for speculation. And it’s easy to see why. With astronomical price gains in short order, the chance to quickly amass wealth has certainly been there.

In my opinion, though, the long-term viability of any digital asset lies in its ability to introduce real-world utility. If people have no reason to use a token or blockchain network in their daily lives, the probability that it will lose value and become irrelevant increases.

And this is the case with Shiba Inu. Even though developers have introduced Shibarium, a Layer-2 scaling solution that is built on top of the main network and that’s meant to reduce transaction fees and increase speed, it’s difficult to see any major improvements yet. Shiba Inu isn’t even in the list of top 100 cryptocurrencies when it comes to the number of developers working on it. And according to, there are only 785 merchants worldwide that accept Shiba Inu tokens as a method of payment.

Cryptocurrencies are characterized as having network effects, which means that they resemble winner-take-all or winner-take-most markets. With this framework in mind, it’s difficult to see why any user or developer would not focus on Ethereum, for example, over Shiba Inu, especially when it comes to decentralized applications.

Unattractive tokenomics

The most compelling argument to own Bitcoin is that there will only ever be 21 million coins in circulation. That’s a hard supply cap that’s etched in the software code. Couple this fixed number with steadily rising demand, and the price is set to rise over time.

Shiba Inu has a different approach. Instead of having a limited token supply, the founders seemingly wanted to create as many tokens as possible. Right now, there are 589 trillion of these tokens in circulation. A coin burning strategy is in place, but it will hardly put a dent in that gigantic figure. This doesn’t bode well for any significant price appreciation.

Despite being well off its peak price, investors should steer clear of Shiba Inu.

10 stocks we like better than Shiba Inu
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Shiba Inu wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of November 6, 2023

Neil Patel and his clients have positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

Read the full story: Read More“>

Blog powered by G6

Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.

For any inquiries, please contact [email protected]