This dog-themed meme coin is competing for Best in Show.
Although Shiba Inu (SHIB 3.81%) has been on a tear so far this year, investors shouldn’t take the meme token too seriously. A dog inspired its name, after all. However, the cryptocurrency’s impressive $16 billion market cap is no joke.
The meme investing craze a few years back turned modest investment into millions — life-changing wealth for some.
Today, Shiba Inu is back to near its highest prices since the bubble started to burst in 2021, with a gain of about 250% in 2024 (as of April 12).
Can Shiba Inu still deliver serious investment returns? Here is what you need to know.
Shiba Inu isn’t catching anyone off guard
Shiba Inu was created in 2020 as an experiment to foster an online community. You could say that’s been a success. Shiba Inu has become very recognizable in the broader cryptocurrency landscape, primarily for its Shiba Inu logo, which many investors associate with fun and speculative investment behavior.
A gigantic circulating supply of just over 589 trillion tokens dilutes the per price to fractions of a penny. One Shiba Inu token is worth about $0.000024. Ironically, that’s a big increase from where Shiba Inu initially traded. To date, the token has appreciated about 2,000,000%. That’s enough to turn $100 into $2 million. So yes, Shiba Inu once had millionaire-making potential.
However, Shiba Inu is much better known these days, which could limit the future upside in the price. Shiba Inu’s market cap is currently about $14 billion, down from $39 billion at its peak in 2021. In other words, Shiba Inu can only double or triple without going into some seriously new territory value-wise. Investors won’t get very far with small amounts of capital without the exponential gains Shiba Inu once had.
The unserious nature of the coin wards off serious investments
The problem is that everyone knows Shiba Inu isn’t a practical, real-world asset. It embodies speculative behavior. The vast majority of people put a small amount of money into it, and hopefully, the price gets hot, and they make a quick buck. About 90% of holders own less than $1,000 of Shiba Inu, and 98% hold $100,000 or less. It’s not an investment reasonably risk-averse investors will put serious money into.
That creates a problem for those hoping to strike it rich off Shiba. It’s unlikely to grow exponentially again anytime soon, and it doesn’t make sense to put enough money into it that a double or triple would create life-changing returns. You’re better off focusing your investment strategy on blue chip stocks and cryptocurrencies.
Is Shiba Inu a millionaire maker?
Shiba Inu was once a millionaire maker. Its huge gains since its introduction exceed the returns of almost any other investment. But Shiba Inu isn’t sneaking up on anyone anymore. It’s well known, and the chances of it repeating comparable gains are minimal at best.
The coin runs on the Ethereum network, so if you want to invest in Shiba Inu for its technological features, consider owning Ethereum instead.
Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.
