After the latest cryptocurrency crash, many investors are concerned about what’s next. Bitcoin (CCC:BTC-USD) has been in quite the slump lately, dropping to its lowest level since July — and remaining about 50% below its record high. Meanwhile, the entire crypto market is down by over $1 trillion due to Bitcoin’s troubles. The prices of coins like Ethereum (CCC:ETH-USD) have more than halved in value. The Shiba Inu (CCC:SHIB-USD) token is also bearing the brunt of this bear activity.
Some crypto investors are predicting a “crypto winter” since cryptocurrencies like BTC have experienced major down periods previously in late 2017 and early 2018. Regardless of your position on the debate, though, the importance of blockchain is not going away. Blockchain is a game-changing technology that has the potential to revolutionize various industries. It’s a distributed ledger that records transactions in blocks — and stores them cryptographically.
Therefore, in the bear market, you have to load up on coins and tokens that have unique use cases. Some people believe that SHIB is a risky token due to its volatility. But others think it could be an interesting opportunity, comparing SHIB to Dogecoin (CCC:DOGE-USD). DOGE was originally created as a joke but has become popular in recent years.
Still, Shiba Inu has no unique use cases and is volatile in nature. It was created for fun and entertainment. Now, its recent metaverse announcement is another example of the price popping for momentary reasons.
Shiba Inu Is Entering the Metaverse
The metaverse is a virtual world that has wide-ranging applications across several sectors. It can be used in the entertainment industry to create innovative gaming and social experiences. Additionally, developers can use it as a platform for virtual real estate. Developers can even use the metaverse for large-scale projects like virtual tourism destinations.
Recently, Meta Platforms (NASDAQ:FB) succeeded in rebranding itself from Facebook, articulating a vision of the internet where people will connect using virtual reality (VR) and avatars. This move has also triggered interest in other metaverse startups. The goal is to create an experience that’s like what you get on the internet today, but in an immersive 3D environment.
On top of this, Nvidia’s (NASDAQ:NVDA) CEO Jensen Huang has said that, in the future, the virtual world won’t just be larger than the physical one. The metaverse will mean a huge boost to Nvidia’s business, since it will be economically viable as a tool for advertising and more. Huang has also said there will soon be a greater degree of immersion in the virtual world.
To that end, Shiba Inu is creating its own virtual world called the Shiberse. This announcement has excited the SHIB community — and made some people optimistic in the face of the market downturn. A lot of social media posts are about SHIB’s recent update and how it will make the token successful in the next few years.
Still, some tokens are losing ground because people are getting more pessimistic and want to put their money elsewhere. Because speculative investments are high-risk, some think these kinds of assets possess substantial volatility regardless.
What to Know About SHIB
Since Shiba Inu doesn’t have its own blockchain, it uses the Ethereum network for its tokens. DOGE and BTC, on the other hand, are examples of popular cryptos with their own blockchains.
That said, if Tesla (NSADAQ:TSLA) CEO Elon Musk supports a crypto, it still gives off an aura of certification. In particular, Musk often tweets about cryptocurrencies — and Shiba Inu is fortunate enough to be on the relatively positive side of those tweets (although the CEO did reveal he holds no SHIB).
What’s more, despite the feeling that memes like SHIB are purely driven by hype or sentiment, the token can be — along with various non-fungible tokens (NFTs) and more — exchanged on ShibaSwap.
Of course, buying altcoins is still risky and the market is volatile. There are many negative consequences. Plus, there’s nothing that Shiba Inu offers that truly provides a competitive edge. It’s a token built on the Ethereum network and has the same transaction fees and occasional lag as other popular cryptos on the network. There are still many other options with lower fees and faster times.
Lack of Use Cases and Real-World Utility
To be fair and upfront, many cryptos have little to no real-world use cases. But Shiba Inu is different. Its lack of real-world involvement is particularly low.
Like with DOGE, Elon Musk is a big influence on cryptos in general and has the power to make or break a name’s success. However, his tweets — positive or negative — will not lead to an increase in Shiba Inu’s use cases.
Overall, announcements like Shiberse will pop the SHIB price, sure. But the price will undoubtedly lose steam in the long run.
On the publication date, Faizan Farooque did not hold (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.
