These days it doesn’t take owning Shiba Inu (SHIB-USD) to appreciate that risk is a part of investing.
But make no mistake, when it comes those more suspect trade ideas, a purchase of SHIB is still more likely to bite back than others. Let me explain.
Just when investors may have thought the worst was surely behind them, Thursday’s stock market retreat on either side of 2% has likely deflated those hopes.
Led by influential losses in large-cap champs Microsoft (NASDAQ:MSFT) and Tesla (NASDAQ:TSLA), February’s bid to shore up the prior month’s corrective damage has quickly unraveled.
Blame it on red-hot inflation data. And many will do just that with the Consumer Price Index hitting multi-decade highs and raised expectations of a half-point rate hike by the Federal Reserve in March following in tow.
Shiba Inu and Risk
But don’t be fooled. Risk assets come in all shapes and sizes.
And Thursday’s outsized 6% loss in crypto Shiba Inu had a zero to perhaps a 0.00003139 chance of SHIB investors calculating the impact of higher priced goods and central bank policy.
In a crypto market that’s still trying to sell itself as something with value other than as a speculative trading vehicle, Shiba Inu brazenly embodies the challenges of that proposition.
The thing is, launched last year by an anonymous developer, SHIB was introduced to one-up the crypto market’s original dog-faced coin and digital joke Dogecoin (DOGE-USD). It’s the “Dogecoin Killer!”
And without being too critical, it makes Shiba Inu laughable and a coin that’s difficult to take seriously despite its Ethereum (ETH-USD) blockchain and smart contract foundation.
Is it Cute?
That said, if we were to liken today’s crypto market to baseball and a game that’s only in the first or second inning of play, SHIB would be cute and comical mascot, not the winner in the digital asset space.
Less cute and more threatening is Shiba Inu’s heady real world valuation in excess of $17 billion.
The market cap has little to show for those efforts other than silliness like an obscure SHIB-themed restaurant delivering fast-food on blockchain in Naples and a SHIB Army that likes to hashtag the latest and greatest.
All told, this dog-faced crypto mascot has the earmarks of biting the hands that feed it.
Shiba Inu Weekly Price Chart
Source: Charts by TradingView
To be fair to the Shiba Inu token owners out there, being comic relief is serious business that requires discipline, stamina and the ability to keep people engagingly entertained. And SHIB has succeeded in that.
To walk the aisle further, could SHIB’s recent announcement of a move into the Web 3.0 with a metaverse named Shiberse and one promising an “immersive experience” and gaming angle be the token’s means to finally being taken seriously?
For now, I won’t hold my breath. Technically though, the Shiba Inu price chart has been making progress trying to make a more serious name for itself.
As the weekly chart reveals, the past two weeks have signaled a downtrend and bottoming candlestick breakout in SHIB-USD.
What’s more, the bullish reversal is occurring with the support of a bullish and oversold stochastics setup.
As much, I can appreciate investors entertaining the idea of being a speculative SHIB buyer. But the buck — or rather the 0.00003139 –stops there.
And bottom line, keeping dreams of another 49,000,000% and early retirement or Shiba Inu’s common grounds with Microsoft — given a very loose Activision Blizzard (NASDAQ:ATVI) metaverse connection — at arm’s length and second to a stop-loss makes sense.
On the date of publication, Chris Tyler holds (either directly or indirectly) positions Grayscale Bitcoin and Ethereum Trusts (GBTC and ETHE). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
