Shiba Inu (SHIB-USD) is currently the 15th-largest cryptocurrency project with a market capitalization of over $13 billion, according to CoinMarketCap. SHIB had an excellent bull run in 2021, and it reached an all-time high of $0.00008845 in October of the same year. However, it has since lost more than 72% of its value. According to Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google Trends, Shiba Inu’s search volume has decreased by 95% since October 2021. And you should probably leave it alone too.
As the hype around Shiba Inu continues to dry up, it will be even more unlikely to see any significant future rebound. SHIB is highly speculative, and anyone seeking to invest would be better off buying projects focused on utility instead.
Moreover, it is likely too late to be investing in Shiba Inu. Since people aren’t as interested in SHIB, it is unlikely to repeat its standout performance of 2021. Some limited short-term profits can be generated, but it is still risky.
Unlike projects such as Bitcoin (BTC-USD) or Ethereum (ETH-USD), which have consistently survived and recovered from many bear markets and crashes, SHIB is a relatively new project and has no such guarantee. There have been nearly 1,700 cryptocurrency projects that have died off, and the Shiba Inu team must work on significantly better utility to avoid joining that list.
Can Shiba Inu Still Succeed?
SHIB has some optimistic developments, such as Layer-2 projects and a high burn rate. However, Shiba Inu’s burn rate, although impressive, is still a drop in a bucket due to its circulating supply of over 549 trillion. The Shiba Inu burning is unlikely to be of much use unless it is done on a much broader and more consistent scale.
As for scalability, most other projects also have Layer-2 plans underway. For example, Bitcoin has the Lightning Network, and Ethereum has the Raiden Network. I find it very unlikely that Shiba Inu will be able to compete with these projects.
Another thing to remember is that Shiba Inu is entirely reliant on the Ethereum blockchain. SHIB is an ERC-20 token and does not have its own blockchain. ERC-20 tokens have high security, but the fees are very high. Higher fees can discourage the widespread adoption of smaller tokens such as Shiba Inu.
Moreover, ERC-20 tokens require Ethereum for transactions, adding another layer of inconvenience.
Shiba Inu’s Supply Will Not Allow It to Reach Expectations
As with almost all meme coins, some investors will have unreasonable expectations.
Experienced crypto investors are aware of their implausibility. However, these expectations can be highly tempting if you are a new cryptocurrency investor. But to reach even 1 cent, SHIB would require trillions in market capitalization due to its high supply.
Cryptocurrencies are primarily valued based on their demand and supply. For Shiba Inu, the demand — or at least the interest — has only been decreasing.
It is safe to say that Shiba Inu will not give you life-changing gains, as it is already the 15th largest project. Shiba will most likely move with the broader market instead. If the cryptocurrency market does go up now, so will Shiba Inu. However, I find it very unlikely that Shiba Inu will be able to consistently grow because of what I’ve already discussed.
Moreover, it is better to stick to safer projects in a bullish crypto market. Altcoins have great potential, but you are unlikely to accurately pinpoint ones that can outperform all other major cryptocurrencies.
Should You Invest In Shiba Inu?
I believe that Shiba Inu is too risky to consider as a long-term investment due to its lack of utility. Shiba Inu’s declining popularity also makes it quite risky in the short term. Instead, you should invest in safer and more time-tested cryptocurrencies like Bitcoin and Ethereum. They are far more likely to give you better and more consistent returns on your investment with significantly less risk.
On the date of publication, Omor Ibne Ehsan 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.