When it comes to Shiba Inu (CCC:SHIB-USD), there’s good news and some bad news.
The pupcoin, which went from being more of a joke than Dogecoin (CCC:DOGE-USD), to briefly becoming more valuable than it, just recently hit a major milestone.
However, is that a reason to buy the dip and get in before it starts making a recovery? Not quite. Yes, this development may bode well for it. But with this countered by whales continuing to take profit, it’s not going to do much to change the current trajectory of Shiba Inu.
That’s not to say that SHIB-USD is dead money from here. Its developers appear to be putting in more effort to make this a high-utility crypto. Developments down the road could help it join the ranks of Cardano (CCC:ADA-USD) or Solana (CCC:SOL-USD), both of which are trying to grab share from DeFi (decentralized finance) leader Ethereum (CCC:ETH-USD). This, in turn, could bring in a wider pool of buyers, helping it surge back, re-hitting its past high, and possibly hitting new ones.
Nevertheless, until more comes out about its plans to improve its functionality, it’s best to stay away. As was the case when I last wrote about this token on Nov. 12, better opportunities are out there among cryptocurrencies.
Shiba Inu and its Recent Milestone
On Thanksgiving Day, Shiba’s developers took to Twitter (NASDAQ:TWTR) to tout what it called “an amazing milestone:” One million investors now hold SHIB-USD. After popping briefly on the news, it’s pulling back again.
Beyond the quick trading opportunity that came and went with this news, are there any other takeaways? Yes. Although pupcoin mania has long since peaked, the Shiba Inu community appears to be still growing. But while in theory that could be seen as a bullish signal, don’t expect it to play out that way.
At least, not until it’s clear that the intensity of profit taking has fallen off. Although whales may not be selling en masse as they were in early November, plenty are looking to sell as the opportunity arises. Case in point, there have been a few headlines about certain whales making big-time purchases of SHIB-USD. For instance, a 850 billion token purchase (worth around $36 million) made on Nov. 23. However, not even this big purchase was enough to move the market in the right direction.
Putting it simply, more holders want to cash out while the going’s still good. This will cease to be a factor, if there are more signs that the best has yet to happen.
Upgrades Needed to Drive the Next Big Boost
More and more crypto market participants may now own Shiba Inu. But this is just driving “whales,” as well as retail traders who got in at lower prices, to sell into the resiliency caused by this positive news.
While this milestone isn’t helping to spark a price rebound for SHIB-USD, there is a different type of milestone that could do the trick: functionality/utility related milestones. With projects like ShibaSwap, this crypto has made a move into the world of DeFi. Yet this DeFi dabbling hardly makes it a possible Cardano or Solana in the making.
If its developers were to implement some serious upgrades, Shiba Inu may have a shot of becoming an Ethereum killer itself. This could enable it to bounce back from its recent losses, and make its way to a valuation on par with ADA-USD and SOL-USD. So far, no news about it has come out. But it’s not something that’s out of the realm of possibility.
Much like Solana did earlier this year, Shiba Inu could finance upgrades via a token offering. Given its high market capitalization (around $20.4 billion at today’s prices), the dilutive impact would be minimal. Once completed, Shiba’s ecosystem could become more attractive to DeFi and dApp (decentralized app) developers. If the market reacts to such progress in the same way it did with Cardano and Solana, it’s not far-fetched to think this token could see a further run-up in price.
Hold Off on SHIB-USD
Even as a growing token holder base is nothing to sneeze at, it’s not enough to restart the now-fading mania that once surrounded this pupcoin.
There is a path it could take in order to grow its valuation. But until it starts going down that path, with serious functionality/utility upgrades, there’s no need to dive into Shiba Inu.
For now, other opportunities in crypto look more promising.
On the date of publication, Thomas Niel held a long position in Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.