Is Shiba Inu ready for a bull run?

The meme token is still a popular cryptocurrency for speculators to bet on, but its future is questionable.

| More on:
A dog sits on the couch, working on a laptop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shiba Inu (CRYPTO: SHIB), the top-performing cryptocurrency in 2021, skyrocketed more than 40,000,000% during the year. Meme-stock mania carried over to digital assets, pushing the prices of some tokens to new heights for no fundamental reason. Profit-seeking investors want a repeat performance this year. 

With Shiba Inu down 30% so far in 2022 (as of 9 March), some speculators might be hoping for a quick bull run that turns things around. Wild price swings are normal when it comes to cryptocurrencies, and, as a result, people are tempted to try and time the market. But this could be a losing game, especially with a cryptocurrency like Shiba Inu, whose future is questionable. 

Here's why. 

Where's the competitive edge? 

Shiba Inu is a token that is compatible with the Ethereum (CRYPTO: ETH) network, meaning that it has exposure to the Ethereum ecosystem, which includes availability on popular wallets and decentralized applications (dApps). However, Shiba Inu is constrained by the same issues facing the world's second most valuable cryptocurrency. These center around slow transaction processing times and high fees. 

The developers at Shiba Inu have a layer-2 solution in the works, called Shibarium, to help speed up transactions and lower costs. If implemented without any major hiccups, Shiba Inu's network could introduce gaming and metaverse applications, building much-needed utility into the system. 

Solving the scalability issue is probably the most important topic in the crypto world today, with the smartest minds working on the problem. Some are skeptical that Shiba Inu, with its lack of differentiation and resources, could make a huge breakthrough here. Even if it does, there are already popular gaming and metaverse options bringing in capital. 

Nonetheless, the possible introduction of Shibarium, as well as a potential listing on the Robinhood Markets app, could be catalysts that push SHIB's price higher in the near term.  

Arguably, the viability and staying power of a cryptocurrency depend on its potential to create real-world utility. Shiba Inu seriously lags behind other projects, particularly Ethereum, in that space. Developers and users will continue to be attracted to larger and more proven blockchains, potentially leaving Shiba Inu in the dust. 

Ignore the FOMO 

The fear of missing out, or FOMO, is something that investors constantly struggle with, especially in today's digitally connected age. We hear others talk about making money from investing in certain stocks or cryptocurrencies. We then feel the need to jump right in as well. News flash: Copying what everyone else is doing is not a viable investment strategy

The feeling of FOMO is exacerbated in the world of cryptocurrencies, where massive price swings in excess of 20% can happen on any given day. There is no shortage of stories out there about people who became millionaires overnight because of a lucky bet on some digital asset. Like Shiba Inu in 2021, meme tokens definitely encourage this type of behavior.

But as I touched on above, a project like Ethereum could be a much better place to park your capital for the long term. It is already making great strides in introducing various decentralized applications (dApps), like decentralized finance services, which bring in more users. This money inflow leads to more developers working on Ethereum in a virtuous cycle. Can Shiba Inu really compete with this momentum? 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Neil Patel owns Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

happy business people celebrate, share rise, record price, increase
International Stock News

2 cryptos that could lead the market recovery

Bitcoin and Ethereum are uniquely positioned to lead the entire crypto market higher in 2022.

Read more »

A young couple look upset as they use their phones.
International Stock News

Not a risk taker? Here’s how that may cost you in retirement

With no risk comes little to no reward.

Read more »

woman working on tablet
International Stock News

3 top US tech stocks that could help make you rich by retirement

Buying and holding these three technology stocks can help grow your portfolio by leaps and bounds.

Read more »

A piggy bank blasts off into the sky.
International Stock News

Why cryptocurrency EOS soared 19% while the market took a breather today

The move follows a positive court ruling over a settlement tied to allegations of unregistered security sales.

Read more »

A worried man holds his head and look at his computer.
International Stock News

Why Bitcoin, Ethereum, and Dogecoin are slumping today

High correlation to equity markets is back, with the price action for major cryptos closely tracking major indices.

Read more »

Amazon boxes stacked up on a front doorstep
International Stock News

Why did the Amazon share price fall today?

The e-commerce giant continues to get pressure on its Prime loyalty program.

Read more »

woman looking surprised watching netflix
International Stock News

Did Bill Ackman give up on Netflix too soon?

Pershing Square sold Netflix in April and isn't looking back. It could be a mistake.

Read more »

Man pointing at a blue rising share price graph.
International Stock News

Why cryptocurrency Chillz continues to surge higher today

This little-known token is now up more than 65% since the beginning of the month.

Read more »