Shiba Inu (CRYPTO: SHIB) was launched in 2020 as a parody of Dogecoin (CRYPTO: DOGE), which itself was a parody of Bitcoin (CRYPTO: BTC). It started trading at $0.00000000051 per token, set a record high of $0.00008845 in 2021, but now trades at about $0.0000057.
In other words, a $1,000 investment in its market debut would have briefly blossomed to $173.4 million before shrinking back to roughly $11.2 million today. That’s still an impressive return for its earliest investors, but anyone who bought Shiba Inu at its all-time high is now underwater.
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Should contrarian investors buy Shiba Inu today, expecting it to recover during the next crypto summer? Or should they avoid it and stick with blue chip tokens like Bitcoin instead?
The bull and bear case for Shiba Inu
Shiba Inu can’t be mined like Bitcoin or Dogecoin. It was created as an ERC-20 token on Ethereum‘s (CRYPTO: ETH) blockchain, and its creators minted its entire supply of one quadrillion tokens before its market debut. They gifted over half of those tokens to Ethereum’s co-founder, Vitalik Buterin, who subsequently burned most of that stake.
Shiba Inu still has a circulating supply of 589.5 trillion tokens as of this writing, so it can’t be valued by its scarcity. It also doesn’t natively support the development of decentralized apps or other crypto assets like Ethereum, since it doesn’t have its own Layer 1 (L1) blockchain. Unlike Bitcoin and Ethereum, Shiba Inu isn’t supported by any spot price ETFs.
The bears believe those limitations will prevent Shiba Inu from keeping pace with Bitcoin, valued by its scarcity, and Ethereum, valued by its utility. Over the past 12 months, Shiba Inu’s price plunged by more than 60% — while Bitcoin and Ether fell by 30% and 17%, respectively.
The bulls will point out that Shibarium, a Layer 2 (L2) network running on top of Ethereum, supports smart contracts (to build decentralized apps) and accelerates Shiba Inu transactions. They’ll also note that T. Rowe Price (NASDAQ: TROW) recently added Shiba Inu and Dogecoin to its upcoming Price Active Crypto ETF. If it’s approved and launched, it might attract more investors and create tailwinds for both of those out-of-favor meme coins.
Should you buy Shiba Inu today?
Shiba Inu might get a little boost from Shibarium’s expansion or new ETFs, but I don’t think it can keep up with Bitcoin or Ether. It simply doesn’t have enough irons in the fire, and investors will likely ignore it because it isn’t a rare commodity or a useful development platform.
