Despite the upsides and potential returns that attract millions of buyers to the cryptocurrency markets, a brand of ‘meme coins’ has proved to be as risky as it can be exciting. While many altcoins have been soaring in the last 12 months as the world has started exploring the variety of blockchain technology concepts and the different decentralized platforms that have emerged as a result, many tokens have been sky-rocketing due to their social media fame.
Just like we see many stock market investors assuming an Elon Musk tweet to be financial advice, many have been hyping up Shiba Inu, the infamous meme token also known as the ‘Doge Killer’. The particular cryptocurrency has gone on to make several people richer, but has also been a reason for monumental losses and wiping out entire portfolios. Here is why you should stay away from Shiba Inu in the coming year.
Shiba Inu (SHIB)
A big reason why cryptocurrencies went mainstream in 2021 had to do with social media buzz and hype around meme coins. Meme coins generally refer to a select few coins which a group of fans rally behind for no real reason other than to increase the price. We have seen this happen with meme stocks like GameStop when a popular subreddit stopped Wall Street VCs from putting the company into bankruptcy. In the crypto space, two major coins have enjoyed huge price increases due to a strong following.
The first big meme coin was Doge, which became popular because of the name and the symbol of the Shiba puppy. Backed by Elon Musk, the coin soared as and when the world’s richest man tweeted about it, but towards the second half of 2022, it developed massive competition.
Known as the ‘Doge killer’, Shiba Inu was another meme coin that completely popped out of nowhere. Created as a joke and a rival to Doge, the token has actually made people millionaires if not billionaires.
One such rag to riches story was shared by the Independent when a warehouse worker put $6,000 into the cryptocurrency at the start of 2021 and retired for life after the token soared more than 700,000%.
Such a return is most definitely once in a lifetime, but Shiba Inu managed to become the 12th largest token in the world with a market cap of $20 billion.
Why did Shiba go up?
Unlike other tokens that have been linked to high-value and high performance, Shiba Inu’s price increase has been purely speculative and based on hype. In September, the token sky-rocketed after Elon Musk posted a picture of his new Shiba dog on Twitter. Right after the post went viral, Shiba went up by a record 49% in a single day. This along with rumours of Shiba Inu being listed on various exchanges like Robinhood and Coinbase made it go up by 1000% in October. Currently, the token is trading at $0.00003637 (Coinmarketcap) and has corrected by more than 50% in the last few months.
When SHIB was rallying throughout October, it also rivalled Dogecoin and managed to flip the latter in terms of market cap. While Dogecoin is sitting above Shiba Inu as we approach 2022, Shiba has managed to have a more impressive year in terms of the price increase.
Should you buy Shiba Inu?
As we enter 2022, there isn’t a lot of concrete news that makes this particular token a must-buy. Price volatility has been increasing in cryptocurrencies and currently, most of the markets have been facing a major correction ahead of the new year.
Shiba Inu does have potential since it is built on the Ethereum platform and working on major developments and projects would fix the image. In fact, the makers of Shiba Inu have even claimed that the platform looks to promote decentralized and spontaneous community building – but not much else has been said about the token. Despite it being treated mostly as a joke and a rival to another meme coin – Shiba Inu still is an ERC-20 compatible token which gives it a huge opportunity to deploy various projects on the blockchain.
But the token is controlled and based on social media hype more than anything else. For all the millionaires that have been made thanks to the meme coin, thousands of people have also lost fortunes betting on similar meme tokens. After the token has continuously been falling for the better part of two months, it would be a very risky bet to get into Shiba at this moment.
This might be a good trading opportunity for day traders who use technical analysis to read charts and back their abilities to discover a breakout, but for long-term investors and beginners looking to bet on something for a few years, there are many other opportunities in the cryptocurrency market.
Shiba Inu price prediction
Many members of the vocal SHIB community have been rumouring about the possibility of Shiba reaching $1, but this seems more like a solid whole number and a good price tag rather than a conclusive prediction. None of the major investors predicts that Shiba Inu will reach the $1 target in the next 3-4 years.
Even the bullish predictions are not very strong for the token. DigitalCoin predicted a possible rise to $0.000072 by 2025, which is a 2X valuation in 3 years. This is lower than the average predictions for most of the market tokens including Bitcoin and Ethereum, which already boast an incredibly high market cap.
So, the possibility of Solana and Shib actually going up or down is not exactly something anyone can predict, but what we can do is look at the projects and the system. Solana is slowly increasing the number of projects being built on the network and has entered the Web3 and NFT space as well, making it an investment for the future. Shiba on the other hand needs some solid use cases other than the social media hype, which could help it in becoming a slightly less volatile coin.