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Resist Investing in Shiba Inu Until Practical Use Cases Increase

The risks associated with investing in crypto assets are extremely high, but you cannot ignore the potential for huge profits. Cryptocurrencies provide an opportunity to invest directly into a booming market that has been begging for somebody like you. However, for risk-averse investors, the crypto-verse is daunting. Many feel that they do not know what they are getting into. Meme coins like Shiba Inu (CCC:SHIB-USD), though, add another level of risk and volatility.

Stack of Shiba Inu (SHIB-USD) coins isolated on white background.
Source: Alfa Grandpa / Shutterstock.com

However, for risk-averse investors, the crypto-verse is daunting. Many feel that they do not know what they are getting into. Meme coins like Shiba Inu (CCC:SHIB-USD), though, add another level of risk and volatility.

In the last few months, several cryptocurrencies have been launched that aim to be used as payment processors. However, most crypto owners only use them for investment purposes because they don’t offer any special features or advantages over Bitcoin (CCC:BTC-USD) or Ethereum (CCC:ETH-USD) other than being cheaper sometimes.

Cryptocurrencies are on everyone’s mind these days, and it doesn’t seem like anyone can escape the trendiness. The crypto world is always bustling with new highs and crazy fluctuations stories. Last year, Elon Musk’s tweets caused SHIB tokens to go parabolic.

Nevertheless, all of this is great for speculation. But it cannot make a definitive case for long-term investment. For the rally to become sustainable, you need use cases and functionality. Shiba Inu is certainly making waves.

But only the most risk-tolerant investors should pour their capital into this one. If you want to invest, then it’s better to invest just a small amount of cash. Think of it as purchasing a lottery ticket. You don’t need to invest much to win big if it’s your lucky day or month.

Lack of Real-World Utility

The lack of real-world use for Shiba Inu makes it an unusual cryptocurrency. The Shiba Inu token has been built on the Ethereum blockchain and offers no special advantages. It’s another cryptocurrency that deals with high transaction fees occasional processing lag times like other popular coins do. The team at SHIB has been slow to embrace new technology so it might remain an ERC-20 token for now.

The crypto-sphere is filled with new options for faster payments, lower fees, and better all-around service. With such competition comes greater innovation; there’s no way an old dog like Shiba Inu can keep up.

It is no surprise that the world’s wealthiest person has been spreading his wealth around by tweeting about dogs and Shiba Inus. The crypto community was unprepared when Elon Musk began posting memes related to this project, taking away from SHIB’s dangerous reputation as a cryptocurrency.

But Musk does not own SHIB. Instead, his holdings include Dogecoin (CCC:DOGE-USD), Shiba Inu’s main rival. Elon Musk, the founder of Tesla (NASDAQ:TSLA) and SpaceX, has announced that he will be working with Dogecoin developers to improve their network. That is a major boon for Dogecoin. But even then, there is no guarantee Dogecoin will develop into something substantial in the crypto world.

It looks like the Shiba Inu has been dethroned as crypto king. But another meme coin is taking up residence on top. DOGE had its time being number one before SHIB overthrew them for a short time. Due to the close association with Elon Musk, it is likely to remain the top pick among meme coins. However, neither of these tokens have use cases like Ethereum (CCC:ETH-USD) and Cardano (CCC:ADA-USD) that could maintain their momentum.

Shiba Inu’s Extreme Volatility Is Not Everyone

Instability is one of the major downsides to investing in crypto. While this volatility can be exciting for some, it also means that investors need to look at how much an asset has fallen and what will happen if they sell before ever getting any return on their investment.

If you’re looking into purchasing SHIB tokens because there’s no room left inside your heart or wallet right now — don’t forget about all those people who might have been pricing something else off while buying yours instead; which could lead them crashing hard when the market sentiment changes tomorrow morning again.

Certain investors seem to be banking on the long-term prospects of the Shiba Inu coin, but there is no doubt that many people are posting about how they want a “pump” or increase in value. The number and type of posts were surprising enough as it stands without looking at other social media boards where you can find countless examples with similar results. We are already in the era of social media investors. Meme stocks prove that this isn’t your grandfather’s stock market. But this type of momentum doesn’t have staying power.

Shiba Inu Is Only for the Most Adventurous Traders

The blockchain technology that underlies cryptocurrencies like Bitcoin can disrupt virtually every industry and transaction forever. There is no doubt regarding its usefulness. However, each blockchain has its unique use cases and functionality. Ultimately, the situation will become clearer once the speculators exit the market.

SHIB doesn’t have much use outside of cryptocurrencies. But it has gained popularity as more people invest in crypto coins. The main reason for its rally is the SHIB community. Investors should be aware of the risks associated with investing in cryptocurrency and anticipate that they may lose some or all their invested funds.

The Shiba Inu’s reign as king of the crypto hill was brief. And it’s unlikely that it can replicate the rally. If you want to invest in meme coins, then you need to set aside a small portion of your lunch money. If it’s your lucky day, then your investment will double or triple with even a small amount of capital.

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. You can check out his analysis on InvestorPlace and TipRanks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/01/resist-investing-in-shiba-inu-until-practical-use-cases-increase/.

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