Here’s Why Bitcoin’s Recent Meltdown Supports the Case for Shiba Inu Now

Not that YouTube videos by random gurus are anything to go by, but there’s been quite some talk about Bitcoin (CCC:BTC-USD) hitting $98,000, either by the end of this month or this year. Since I’m not about calling out any one specific individual, just do a search for “Bitcoin 98,000” to see. However, recent volatility in the cryptocurrency space lends support for betting on Shiba Inu (CCC:SHIB-USD).

A close-up shot of a Shiba Inu dog.
Source: Shutterstock

Now, hold onto your seats folks, because I’m about to tee off quite a few people in one sitting. Obviously, Shiba Inu is a terribly risky idea. As others have pointed out, anything that’s priced at a fraction of a fraction of a fraction of a penny is not what you would call a comfortable place to park your money.

I like how InvestorPlace contributor Will Ashworth put it: “Let’s face it. Buying SHIB-USD is akin to buying a lottery ticket. If you can be honest about this fact, I don’t see what’s wrong with using some fun money to bet on it.”

However, if you think that Shiba Inu is an investment, Ashworth bluntly states that it’s not. It doesn’t mean you can’t make money from SHIB because you clearly can. Nevertheless, it’s a pure gamble, irrespective of what the ardent bulls tell you about its fundamentals.

I would be remiss not to point out, though, that context matters. With Bitcoin being priced into the stratosphere, I think you’re gambling with Shiba Inu. Long story short, you don’t need to put as much capital at risk. Thanks to the law of small numbers, anything — news, rumors, somebody flatulating in the wind — could see SHIB gain 3x returns in the blink of an eye.

Bitcoin, being the larger and more established of the two, can’t quite say the same thing.

Shiba Inu is a More Comfortable Trade

As you undoubtedly know if you follow the space, Bitcoin is having a rough moment. In the wee hours of Nov. 16, BTC dropped below the critical $60,000 threshold. Currently, the crypto coin is clawing its way out of the mess, trading hands around $60,500.

In the trailing seven days, BTC shed 10.6%. During the same frame, Shiba Inu dropped slightly more than 11%. Therefore, we’re unfortunately seeing a familiar tale play out again. When Bitcoin drops, so too do most other crypto coins.

Still, the point stands. It’s better to trade a relatively small number of dollars in Shiba Inu because the rewards are higher and the risks are lower. With Bitcoin today, the rewards are lower and the risks are higher.

Immediately, the counterargument is that the higher ticket price for Bitcoin is justified through a fundamentally more robust virtual currency. Thus, there’s a higher probability that BTC will generate a profit (however relatively small that may be).

But then, you’ve got to ask, does Bitcoin actually have any fundamentals?

An outrageous question I know, especially coming from someone who has benefitted handsomely from the crypto space. I am truly grateful. But applying the same logic, whom shall I thank?

You see, if you had gotten rich off Tesla (NASDAQ:TSLA) stock, you have someone in mind, namely the genius entrepreneur Elon Musk. But with Bitcoin, I don’t even know if the underlying blockchain technology was built by a person or by a team.

In other words, Bitcoin — like Shiba Inu — is an idea, an idea that is open source and thus cannot be copyrighted. It’s like YouTube car vlogger Doug DeMuro attempting to copyright the word “this.” Certainly, he’s made “this” great again, but he can’t monetize it.

It’s All the Same SHIB

This brings me to uncomfortable conclusion. When you’re dealing with cryptos, you’re not dealing with an entity that cares whether you participate in the journey or not. Instead, you’re hoping that everyone else shares the same beliefs you do.

Because when you get down to the core of the issue, there are fundamentally few if any differences between Shiba Inu and Bitcoin. Both are decentralized, meaning that both depend on consensus that they actually have value.

To be fair, the consensus argument is much greater for Bitcoin because so many people and institutions have caught the fever. But we’re not talking about the difference between a consensus-driven platform and its antithesis. No, we’re really talking about the difference in magnitude of consensus.

As I said, BTC has an exponentially higher magnitude of consensus. But at $60,000-plus, that’s a steep price to pay over Shiba Inu, which offers basically the same consensus-driven ethos but at an exponentially lower price.

On the date of publication, Josh Enomoto held a LONG position in BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/why-bitcoin-meltdown-supports-shiba-inu/.

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