Mention the altcoin Shiba Inu (SHIB-USD) among crypto bulls and you are likely to get a wide range of views. Critics argue SHIB-USD lacks real-world utility. Thus, its explosive growth has been due to retail investor hype. Yet, Shiba fans claim it’s more than just a meme coin while it gradually expands its ecosystem.
One fact is clear though: the price of Shiba Inu coin remains highly volatile. The token returned roughly 46,000,000% in 2021. An initial investment of just $10 could have made you a multi-millionaire within a year. Now, many wonder whether Shiba Inu can ever see such returns again.
SHIB-USD is now worth $0.00002262, down 72% from its all-time high (ATH) hit in October, 2021. Despite the considerable dip, its market valuation of $12.4 billion still makes it the 15th most valuable cryptocurrency.
Yet without a tangible competitive advantage, SHIB-USD is not likely to repeat its remarkable performance in 2021. Even if the crypto market sees another bull rally in 2022, Shiba Inu looks like a risky bet with little underlying value. Let’s see why.
SHIB-USD Started as a Meme Crypto
In addition to the SHIB-USD token, there are also Bone ShibaSwap (BONE-USD) and Doge Killer (LEASH-USD) coins associated with the network. With these three names, users can stake, swap or deposit into liquidity pools on the ShibaSwap decentralized exchange. Meanwhile, users can trade SHIB-USD to and from other cryptocurrencies.
Tailwinds for Shiba Inu
Several near-term developments hold the potential to trigger a rebound in SHIB-USD. In 2022, the platform is expected to launch the layer-2 blockchain project Shbarium.
Regular InvestorPlace.com readers would know that Shiba Inu is built on top of the Ethereum (ETH-USD) blockchain, facing network congestion issues and high gas fees that weigh on the Ethereum network. Shibarium aims to overcome slow processing times and reduce transaction fees for Shiba Inu. The key objective is to pave the way for non-fungible token (NFT) based gaming in 2023.
Shiba Inu also revealed that it was entering the metaverse with Shiberse. Meanwhile, independent developers recently announced Shiba Lands, which will allow users to buy virtual real estate within the Shiba metaverse.
We should note that Shiba Lands will be sold for LEASH-USD, and not SHIB-USD tokens. So the benefit to SHIB-USD remains to be seen. And LEASH-USD, a highly centralized coin, does not seem have an anti-dumping protection, which is a big concern.
Nonetheless, some Ethereum whales possibly believe Shiba Inu may emerge as a significant metaverse player. For instance, according to the whale-tracking website WhaleStats, SHIB-USD is one of the leading tokens traded by Ethereum whales.
The Bottom Line
For now, the bullish case for Shiba Inu primarily relies on a large community of dedicated supporters. Platforms like Reddit and Twitter have proved to be valuable tools for generating short-term momentum in the price of SHIB-USD. The coin still lacks the real-world utility necessary to stand out in the crowded crypto space.
The Shibarium launch and development of gaming capabilities sound like major growth catalysts. However, we still do not know how Shibarium may differentiate itself in the metaverse space from formidable competitors, such as Decentraland (MANA-USD) or The Sandbox (SAND-USD).
At this point, Shiba Inu’s success still lies in retail investor speculation and social media hype. But the increased adoption of SHIB-USD by online exchanges like Robinhood Markets (NASDAQ:HOOD) could become a key potential growth driver. Therefore, SHIB-USD is still a highly speculative investment.
On the date of publication, Tezcan Gecgil 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.