There’s No Need to Buy Shiba Inu As Rebound Prospects Remain Murky

Many factors have played a role in pushing Shiba Inu (CCC:SHIB-USD) lower in recent weeks. First, there’s the overall sell-off in crypto, caused by investors reacting negatively to a more hawkish Federal Reserve.

A concept token for the Shiba Inu (SHIB) crypto with lights sparkling in the background.
Source: Shutterstock

A close second is the waning popularity of “pupcoins” also put pressure on Shiba Inu. But of course, the reason for the sell-off isn’t what matters here. Instead, HODlers and curious observers alike want to know if it can make a comeback.

It’s possible, for sure. All it’ll take to send it soaring again is for the speculators to stampede back into it. Will that happen? I wouldn’t count on it.

In the near term, a second round of pupcoin mania appears unlikely. It could sell off further, depending on how investors react to further remarks from the Fed. It’s long-term potential is also questionable, despite possible exposure to the DeFi and metaverse trends.

Put it all together, and steering clear of Shiba Inu is still your best move.

Shiba Inu May Continue to Falter

Down nearly 60% from its all-time high of 0.008 cents per token, some may be dabbling in SHIB-USD today in the hopes that a turbo-charged rally will appear out of left field.

But just because that played out twice in October doesn’t mean it’ll play out once more for Shiba Inu. The pupcoin trend long since peaked. In the meantime, a new hot trend among crypto, metacoins, has emerged. This trend too also appears to have peaked. At least, based upon the sharp pullbacks seen with metaverse-themed coins like Decentraland (CCC:MANA-USD), The Sandbox (CCC:SAND-USD), and Enjin (CCC:ENJ-USD).

Still, I would bank on this trend experiencing a second wave. Big tech’s big bets on the metaverse give this crypto trend a lot more social proof than the tongue-in-cheek cheerleading Elon Musk does for dog-themed coins and tokens. Along with this, there’s something else that makes the chances of a mad dash back into Shiba questionable: the change in sentiment for crypto that’s emerged due to the Fed’s recent statements on inflation.

In the immediate future, crypto could continue to waver. Worse yet, if it’s clear the Fed is ready to speed up tapering and interest rate hikes, cryptocurrency could see severe downward pressure. Taking both these factors into account, buying SHIB-USD as a short-term trade today doesn’t seem opportune.

Long-Term Potential Is Also Questionable

OK, so Shiba Inu may have slim chances of a rebound in the coming weeks. It may even experience another bit of sharp volatility, depending on what actions the Fed decides to take. But what about the long term?

Yes, given its success so far with projects like ShibaSwap, I wouldn’t discount its chances of making its ecosystem DeFi-compatible enough to take on Ethereum (CCC:ETH-USD), along with top Ethereum killers like Cardano (CCC:ADA-USD) and Solana (CCC:SOL-USD). Then again, Shiba has yet to go down that path. Instead of buying Shiba Inu ahead of it officially starting to go in that direction, waiting for it to start doing so may be the better move.

More recently, the prospect of it becoming a metaverse play has also emerged. This may too seem like a possible long-term catalyst. As InvestorPlace’s Brenden Rearick reported Dec. 11, Shiba Inu is building its own metaverse, called Oshiverse.

This latest move, however, seems more like an attempt to stay relevant, rather than something that will help move the needle for SHIB-USD down the road. This is very similar to what’s going on now with one of its main imitators, Floki Inu (CCC:FLOKI-USD), which is coming out with its own gaming metaverse early next year.

Just like I wouldn’t buy it on the assumption it’ll become widely used in DeFi, I wouldn’t buy on the assumption its planned metaverse will see mass adoption.

The Bottom Line

Shiba Inu may have minted serious fortunes for its early adopters. But I wouldn’t count on anymore “laughing all the way to the bank” moments for investors long this jokecoin.

The trend that sent it to the moon has come and gone. Crypto at large is at risk of falling further, as sentiment shifts to risk-off. A near-term rebound looks unlikely. Even with its possible DeFi and metaverse catalysts, long-term prospects are also murky.

Now looking less promising, no matter your investment time horizon, keep taking a hard pass on Shiba Inu.

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.


Article printed from InvestorPlace Media, https://investorplace.com/2021/12/shiba-inu-rebound-prospects-murky-hold-off-buying/.

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