Shiba Inu Coin (SHIB) has had nothing short of a meteoric rise and bills itself as the “Doge Killer.” Of the top cryptocurrencies, it’s doubtless the most volatile. This could mean some big gains- and a path to wealth?
Unfortunately, Shiba Inu is a shitcoin. If its aim is to replace Doge, that’s not a super high aim, given Doge is also a shitcoin. Shiba’s origins are a bit sketchy, and center around Ethereum cofounder Vitalik Buterin. Shitcoins exist in part to make their founders and original investors rich, which has happened already. The rest (including most who are holding the bag now) are going to be out of luck if they’re hoping for the same parabolic gains early in the coin’s existence.
About Shiba Inu Coin
Shiba was founded in August 2020 (wow! such a strong track record!) by a mystery feature named Riyoshi. Right off the bat, it sounds like this coin was intentionally made by a mystery figure to appear like it’s Bitcoin. Bitcoin of course was founded by Satoshi Nakamoto, a pseudonym for a couple of white middle-aged software engineers in California. It’s tough to take something worth $15 billion by market cap that’s been around for less than 14 months seriously.
To get to $0.01
In order for Shiba Inu to get to $0.01, the project would need to have a market capitalization of $5 trillion. That would be the equivalent of the sum of the valuations of Apple, Google, and Facebook combined. That is wildly, wildly unrealistic. Despite these simple facts, there appears to continue to be rampant stupidity and hysteria surrounding this project. A recent survey shows that at least half of all Shiba Inu holders believe that the coin will one day reach $1.
How memecoins and shitcoins are able to proliferate
People fail to understand that in order for projects to grow long-term, there needs to be some kind of underlying economic value of the coin. People could just people it to be a store of value, like Bitcoin, and that’s fine. The short of how valuable a project is is its market capitalization. This is the (number of coins * price of each coin). Shiba Inu has a lot of coins, with a circulating supply in the hundreds of trillions, and a total supply of one quadrillion.
This is intentionally done to make the price of each coin look “cheap”. Currently, the coin is sitting at $0.0000XxX. People look at the price of Shiba, then look at the prices of nearly every other crypto in the top 100 with prices of $1.17 and $63,457 and $43.56 and immediately think Shiba is undervalued.
In early 2021, the Wall Street Bets (r/wallstbets) community on Reddit demonstrated how powerful the ‘mob mentality’ can be when rallying the price of a specific crypto or stock. Shiba Inu has a strong presence on Facebook, Reddit, Instagram, and every other corner of the internet. This virality can hold the price of a coin up for a while, but not forever.
Except to lose with memecoins and shitcoins long term
The Shiba project is aiming to adopt some actual use-case ‘after the fact’ now that the project has plenty of money. SHIB is aiming to be another smart-contract proof of stake crypto, but it remains unclear what specific value can be added. I have personally found projects like this one to underperform relative to the greater crypto market when everything else is moving- and it’s frustrating. It’s always good to look at your investments on a risk adjusted basis. Sure, the returns could be good- but what will the losses be when there is a correction? Those can take a while to recover from.