Shiba Inu coin: meme to one of the biggest digital currency
Find out why SHIBA INU has been successful, still remains a high-risk investment and what the next move is for investors
In the past decade, cryptocurrencies have grown in prominence as an asset class. Several digital assets have experienced exponential growth as a result of extensive global adoption as well as tweets from prominent figures such as Elon Musk and Vitalik Buterin.
In the last 15 months, the value of one cryptocurrency named SHIBA INU has surged 50,000 times, converting a $100 investment into $5 million. SHIBA INU is a meme coin that was launched in August 2020 and has been advertised as a Dogecoin competitor. One SHIBA INU coin was priced at $0.00000000051 per token on the first day of trade, and it is now trading at $0.00002571 per token.
SHIBA INU was launched on Coinbase, the world’s largest crypto exchange, last month, resulting in a 40 per cent surge in its token price over the next two days. SHIBA INU currently has a market capitalisation of $15.68 billion, making it the world’s 13th largest cryptocurrency.
What drives the price of SHIBA INU?
While there are 21 million Bitcoins to mine, the total amount of SHIBA INU tokens is limited to one quadrillion. Elon Musk’s Tesla said earlier this year that it now had Bitcoin on its balance sheet, causing cryptocurrency values to rise. Mush also adopted a Shiba Inu dog, which he tweeted about on several occasions, contributing to the digital asset’s incredible increases.
ShibaSwap is also a decentralised exchange that began operations in early 2021. Investors can now earn interest by staking their SHIBA INU tokens, which will encourage traders to hold onto their investments for longer periods of time, lowering market volatility.
Why is SHIBA INU still a high-risk investment?
Despite its impressive profits, investors should be aware that adding SHIBA INU to their cryptocurrency portfolio is fraught with danger. The bitcoin market is unregulated and susceptible to fraud. However, given the token’s lack of real-world utility, these concerns are amplified for SHIBA INU.
According to a Cryptwerk analysis, only 91 businesses accept SHIB as a means of payment, despite the fact that the United States alone has over 30 million enterprises. Dogecoin, on the other hand, is accepted by over 1,700 businesses, including AMC Entertainment.
Furthermore, according to Coinbase data, the average holding period for the token is roughly 13 days, indicating that traders are largely buying the digital asset for the purpose of making quick cash and not as a long-term investment.
The next step for investors
The low holding period and less-than-impressive adoption rates for SHIBA INU do not inspire much confidence. There are approximately 13,000 cryptocurrencies in circulation, and this number is expected to rise in the future, putting additional pressure on SHIBA INU to remain relevant.
In terms of transaction costs or processing times, SHIBA INU does not offer a competitive advantage. Currently, only over 7,50,000 people own the token, compared to 10 million for Ethereum and 76 million for Bitcoin. Furthermore, the top 100 accounts own 82 per cent of all SHIB tokens, undermining the concept of a decentralised currency and making it a dangerous bet right now.
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