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Cryptocurrency News Articles
Shiba Inu (SHIB) Has Lost 85% of Its Value. Should You Buy the Dip?
Sep 17, 2024 at 05:18 pm
In the 12 months between Jan. 1, 2021, and Dec. 31, 2021, Shiba Inu (SHIB) delivered a return of 45,278,000%, which could have turned a perfectly timed investment of just $3 into more than $1 million.
Shiba Inu (CRYPTO:SHIB) had an interesting 2022. The meme-token started the year trading at $0.000033 and closed out the year down 75% at $0.000008. It hit a record high of $0.000086 in October 2021, but that was short-lived as the token fell victim to the crypto winter and a wave of selling pressure.
Despite the downturn, Shiba Inu still managed to deliver a return of 45,278,000% in the 12 months between Jan. 1, 2021, and Dec. 31, 2021. A perfectly timed investment of just $3 at the beginning of 2021 would have turned into more than $1 million by the end of the year. That trounces the return of just about every stock in history — including Nvidia, which is up 476,000% since its initial public offering (IPO) in 1999.
But Shiba Inu's fate is often determined by speculators, which makes its trajectory hard to predict. On the flip side, there's no telling when (or if) the token will embark on another historic bull run as it did in 2021. Should investors buy it while it's trading below $0.0001?
Shiba Inu faces a critical hurdle — adoption
Crypto enthusiasts have often touted cryptocurrency as a viable replacement for traditional money because it's decentralized and can't be controlled by any one person or government. However, consumers and businesses don't appear convinced. Even the industry leader Bitcoin has failed to gain traction as a currency. Just 9,524 merchants around the world accept it as payment for goods and services.
Shiba Inu has fared even worse, with just 981 merchants in its ecosystem right now. If consumers can't spend their tokens at their favorite stores, they don't have an incentive to hold them, and it's very difficult to create value without that organic demand.
Developers have tried to create new use cases to encourage the adoption of the Shiba Inu token, but none seem to be sticking. They've been working on a metaverse since 2022, where users can spend tokens to add logos, photos, and even custom names to their virtual parcels of land, but it has yet to officially launch and there's no firm release date.
Developers introduced a Layer-2 blockchain solution called Shibarium last year, which removes some of the inefficiencies associated with the legacy Ethereum network upon which Shiba Inu was built. It's now cheaper and faster to transact with the Shiba Inu token, but it doesn't appear to have boosted adoption or its price.
A Layer-3 blockchain solution might also be on the way, which will enhance privacy and offer customizations to facilitate a higher volume of transactions. But that simply puts the cart even further ahead of the horse — without widespread adoption, a more efficient network isn't useful or even needed.
Shiba Inu's substantial supply might limit further upside
Even if Shiba Inu cracks the adoption problem, the enormous supply of tokens could limit further upside. There are 589.3 trillion tokens in circulation, so even at the minuscule price of $0.000013, Shiba Inu has a market capitalization of $8.1 billion. Simple math dictates that if the price rose to $1 per token, Shiba Inu's market cap would hit $589.3 trillion.
That would make the meme-token 21 times more valuable than the entire U.S. economy, which generates about $28 trillion in gross domestic product (GDP) each year. In other words, we're unlikely to ever see Shiba Inu trading at $1 per token.
It could, however, reach a price of $0.0001. It would require a gain of 670% from here and would take Shiba Inu's market cap to $58.9 billion, which is a little less stratospheric. The move would have to be driven entirely by speculation unless developers somehow conjure up a way to drive adoption. But it would only represent a small gain beyond Shiba Inu's previous all-time high of $0.000086, so it wouldn't be entirely uncharted territory.
It's impossible to predict speculation fever, so I wouldn't buy Shiba Inu now, even if there is a tiny, tiny chance of another historic run in the future. There are so many high-quality stocks that investors could buy, instead, with much more predictable returns.
Disclaimer:info@kdj.com
The information provided is not trading advice. kdj.com does not assume any responsibility for any investments made based on the information provided in this article. Cryptocurrencies are highly volatile and it is highly recommended that you invest with caution after thorough research!
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- Infinet (INFI): A New Entrant to the Cryptocurrency Market Worth Taking a Closer Look At
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