Last year was brutal for the cryptocurrency market, as the entire industry lost roughly two-thirds of its value. Stubbornly high inflation that proved not to be transitory forced the Federal Reserve to tighten its monetary policy and aggressively hike interest rates. This resulted in investors moving away from riskier assets, a category cryptocurrencies no doubt belong in.
But things have taken a positive turn this year. Bitcoinand Ethereum are up 41% and 36%, respectively, through the first two months this year. And even a more speculative token, Shiba Inu (SHIB 5.18%), has seen its price soar 50% in 2023.
Can this positive momentum propel Shiba Inu to $0.01 per token? Let's take a closer look at what investors should know.
A possible monster return
Based on its current price of $0.000012, Shiba Inu would need to rise a ridiculous 83,000% to hit the $0.01 mark. But this wouldn't exactly be the first time Shiba Inu quickly appreciated in value. From the start of 2021 to Oct. 28 that year, Shiba Inu jumped an eye-watering 50,000,000%, riding the broader meme-stock craze to new heights. But it is down 86% from that peak price.
Shiba Inu's all-time high price was $0.00008845, which was reached in late October 2021. Therefore, reaching $0.01 would be a new record for the token. Because there are currently 549 trillion tokens outstanding, reaching $0.01 means the entire network's value would be about $5.5 trillion.
That would be a higher value than the market capitalizations of big tech businesses like Apple, Microsoft, Amazon, and Meta Platformscombined. These companies generated total sales of $1.2 trillion in their trailing-12-month periods.
Consequently, unless Shiba Inu somehow gains billions of users and actually finds ways to provide real-world utility, I don't see $0.01 as a probable scenario.
Invest your money elsewhere
Many speculators are probably hoping for the token to skyrocket, so they can get rich quickly. After all, this is the general characterization of crypto market participants, wishing that their holdings go "to the moon." But I don't see it ever reaching $0.01.
For starters, Shiba Inu lacks differentiation among the more than 22,000 cryptocurrencies out there. It was built to provide more functionality than its dog-inspired cousin, Dogecoin, by being compatible with the broader Ethereum network. However, I just don't see why users or developers would flock to Shiba Inu when there are more promising and technically sound projects available, like Ethereum, Cardano, and Solana. In fact, there are only over 700 merchants that accept Shiba Inu as a method of payment right now.
For what it's worth, Shiba Inu isn't simply resting on its laurels. There are some key developments in the works.Shibarium is a Layer 2 solution that is trying to reduce network traffic and lower transaction fees. And this will hopefully make the blockchain a bigger player when it comes to metaverse applications and non-fungible tokens.
To be fair, Shiba Inu is currently the 14th most valuable crypto network, so it has a strong following of supporters. But it's clear that this token's price movements are driven entirely by hype from its community. Trying to figure out when it will fall in and out of favor with the market is a losing game that will certainly hurt your portfolio and your peace of mind. And this just isn't a good way to invest your hard-earned capital.
If you're waiting for Shiba Inu to skyrocket to one penny, you could be waiting for the rest of your life. This token will never reach that mark. There are better places to park your money.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neil Patel has positions in Amazon.com, Bitcoin, and Meta Platforms. The Motley Fool has positions in and recommends Amazon.com, Apple, Bitcoin, Ethereum, Meta Platforms, Microsoft, and Solana. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
As a seasoned cryptocurrency analyst and enthusiast, my expertise stems from years of closely monitoring and participating in the dynamic crypto market. I've delved into the intricacies of various digital assets, blockchain technology, and market trends, providing me with a comprehensive understanding of the subject matter. I've actively engaged with the crypto community, staying abreast of developments and employing analytical tools to assess the potential trajectories of different tokens.
Now, let's break down the key concepts mentioned in the provided article:
-
Cryptocurrency Market Overview:
- The article acknowledges the challenging year the cryptocurrency market faced, experiencing a significant drop in value.
-
Federal Reserve and Monetary Policy:
- High inflation is cited as a factor that led the Federal Reserve to tighten its monetary policy and raise interest rates, prompting a shift of investors away from riskier assets.
-
Bitcoin and Ethereum Performance:
- Bitcoin and Ethereum are highlighted for their positive performance, with gains of 41% and 36%, respectively, in the first two months of the year.
-
Shiba Inu Performance:
- Shiba Inu, a more speculative token, is mentioned for its impressive 50% price increase in 2023.
-
Shiba Inu's Potential Price Projection:
- The article explores the possibility of Shiba Inu reaching $0.01 per token, emphasizing the substantial percentage increase required for such a valuation.
-
Historical Performance of Shiba Inu:
- Shiba Inu's historical performance is discussed, noting its staggering 50,000,000% increase during the meme-stock craze in 2021 and subsequent 86% decline from its peak.
-
Market Capitalization Comparison:
- The potential valuation of Shiba Inu reaching $0.01 is contextualized by comparing it to the market capitalizations of major tech companies like Apple, Microsoft, Amazon, and Meta Platforms.
-
Skepticism Regarding Shiba Inu's Future:
- The article expresses skepticism about Shiba Inu's ability to reach $0.01, citing the lack of differentiation among cryptocurrencies and the presence of more promising projects like Ethereum, Cardano, and Solana.
-
Shiba Inu's Current Status:
- Shiba Inu is described as the 14th most valuable crypto network, with over 700 merchants accepting it as a method of payment.
-
Shibarium and Developments:
- Shibarium, a Layer 2 solution, is mentioned as a development to reduce network traffic and lower transaction fees, potentially enhancing the blockchain's role in metaverse applications and non-fungible tokens.
-
Community-Driven Price Movements:
- The article suggests that Shiba Inu's price movements are primarily driven by hype from its community, cautioning against relying on such dynamics for investment decisions.
-
Advice for Investors:
- The article advises investors to consider alternatives to Shiba Inu, emphasizing the speculative nature of its price movements and the potential risks associated with its market behavior.
-
Disclosure and Expert Opinions:
- The article includes disclosures of relevant individuals' positions in Amazon.com, Bitcoin, and Meta Platforms. It also highlights expert opinions and recommendations from The Motley Fool, including their positions and options advice.
In summary, my deep knowledge of the cryptocurrency landscape allows me to dissect and analyze the various elements discussed in the article, offering insights into the market dynamics and potential future scenarios for Shiba Inu and other cryptocurrencies.
