Shiba Inu (CCC:SHIB-USD) went from a market capitalization of $3 billion to a value of nearly $30 billion in a few weeks. Social media users and and Elon Musk hyped up the coin, and this meme crypto is doing wonders for the aggressive investor.
The token’s next goal is hitting a price of one cent. Considering what has transpired in the last few weeks, you cannot rule out that possibility. That will lead to a mind-boggling market cap of $5 trillion if it happens.
In a surprising move, Coinbase (NASDAQ:COIN) started allowing Shiba Inu trading in September. The crypto could not have asked for anything better than this short-term catalyst, and its prices soared in response.
In the longer run, though, these meme coins will not amount to much. They are just trading on momentum, and without any use cases, they will eventually come back down to earth.
However, in between this time, short-term traders will continue to benefit. Hence, tracking coins like Shiba Inu becomes frustrating.
On the bright side, this should not deter you from investing a small amount of your capital. After all, people are racking up millions just by staying up-to-date with social media and following posts on Reddit.
There is nothing wrong with this approach. However, you have to remember that like all other frenzies, this too shall pass in the long run.
Will Shiba Inu Land on Robinhood Soon?
Shiba Inu continued its skyrocket in October and is now a crypto giant thanks to its army of devoted fans and investors. Once a second-tier meme coin, Shiba Inu is now challenging crypto bigwigs like Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD) and Cardano (CCC:ADA-USD).
What’s more, rumors are circulating that the coin could be listed on Robinhood (NASDAQ:HOOD). The coin reached all-time highs in September after a petition asking the exchange to add Shiba Inu gathered more than 500,000 signatures.
Many investors believed this could propel its value higher than ever before. But the platform is still on the fence with this one.
Christine Brown, Crypto COO of Robinhood, said the platform is not in a hurry to list more tokens. Brown did not offer any insight on Shiba Inu, or meme coins in general. But she did say the firm has very strict guidelines for what they will and won’t list.
Robinhood is wary of putting forth volatile assets, which could be dangerous or violate regulatory compliance laws. Therefore, meme coins aren’t exactly a top priority at this time.
Speaking on the matter at a function hosted by Yahoo! Finance and crypto publication Decrypt, Brown said,
“…our strategy is a little bit different than a lot of the other players out there who are just racing to list as many assets as possible right now … We think that the short-term gain we might get is not worth the long-term trade-off for our users.”
Why Invest in Meme Coins?
Investors should be aware of the volatility and risk associated with Shiba Inu. The short-term dips allow day traders to pump up this currency, then dump it for potential earnings. These frequent and unpredictable moves have caused experts to warn against investing heavily in these assets.
There are more than 10,000 cryptocurrencies out there. Aside from a select few coins, none of them will be worth much in the long run. But if that’s the case, why are people investing in Shiba Inu?
Well, part of it has to do with the FOMO, or the fear of missing out. The other thing is that you do not need a lot of money to play this space. Speculating on crypto is easy because the risk of losing everything you invested is limited.
With other investments, people can lose their entire life savings in one trade gone wrong. But with cryptocurrency, you only need a few hundred bucks to make a considerable profit — so long as you don’t invest a very high amount.
It’s Better to Avoid Shiba Inu, Despite the Allure
If you want to invest in cryptocurrencies, there are better options out there. Chief among them is Ethereum. Two upgrades are on the horizon that will pop the price.
At the moment, Ethereum is using a proof of work (PoW) model, which is subject to a lot of criticism because it’s energy-intensive. However, in 2022, Ethereum is looking to transfer to a proof of stake (PoS) model that uses less energy. Along the way, investors will be rewarded.
It’s difficult to predict the future of Shiba Inu, as it’s hard to say if Robinhood will allow trading of the token. If they do, the market cap will skyrocket. On the flip side, if it does not happen, the coin will lose steam fast.
However, this is not set in stone. All you need is another Elon Musk tweet to push up the price of Shiba Inu.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio. Faizan does not directly own the securities mentioned above.