The cryptocurrency market can sometimes seem like a puppy mill, churning out new coins that generate a lot of initial excitement.
Take Shiba Inu, for example. The cryptocurrency token is named after the canine breed. This is the same mascot of another popular cryptocurrency, Dogecoin – a crypto asset that started as a laugh but has recognition with the “meme” crowd.
While it’s less than a year old, Shiba Inu Coin (SHIB) already features a market value greater than $3.8 billion by early June 2021, rendering it the 31st-largest cryptocurrency by market capitalization, following CoinMarketCap. In another sense, Shiba Inu is quite small. Each token is just worth $0.000009677. That makes it attractive for new cryptocurrency investors, especially when well-established picks such as Bitcoin cost significantly more than $38,000 for just one token.
Simply because something is popular, though, doesn’t mean it is a good investment. Experts suggest performing a lot of study before purchasing the cryptocurrency market. Some tips about what investors should understand before buying Shiba Inu coin:
What Is Shiba Inu Coin?
Shiba Inu is a token that exists on the Ethereum blockchain. The coin’s mysterious founder, called “Ryoshi,” says the project is “a test in decentralized spontaneous community building.”
While there’s no cap on the maximum amount of Dogecoin units, there is a cover – albeit a lofty total supply of 1 quadrillion – for Shiba Inu units.
Both Shiba Inu and Dogecoin, like other meme investments, have gained in value as investors discuss their perceived merits online and elsewhere in society.
The Shiba Inu white paper – dubbed by its creators as its “woof paper” – lists leaders of international chatrooms, social media influencers, and meme-makers as part of the town behind Shiba Inu’s success.
“Before the point at which it begins to become accepted as a means of payment for goods and services, a crypto’s value is practically entirely something of its social media buzz, and at this time Shiba is surely a top-10 crypto because category,” says Eric Berman, senior legal editor of U.S. finance at Thomson Reuters Practical Law. “Those looking to identify another breakout coin are well-advised to join Reddit and Twitter and follow the hashes.”
What Would be the Advantages of Shiba Inu Coin?
Along with the hype from influencers, Shiba Inu Coin’s appeal arises from the desire for passive income from staking and the fear of missing out from people who weren’t an area of the Dogecoin gold rush.
The ripple effect from Dogecoin’s rise in price has helped other meme tokens, including Shiba Inu Coin, creating the prospect of short-term gains, says Marie Tatibouet, chief marketing officer with Gate Technology.
Another benefit may be more philosophical. “Many see meme tokens such as, for instance, Dogecoin and Shiba Inu as projects which can be nothing more than a laugh, but it has acted as the first step for a lot of crypto newcomers, who will probably purchase other projects,” Tatibouet says. “So, in the long run, the wider crypto market probably will see further growth and interest.”
With Shiba Inu’s low cost, investors can get in while risking what amounts to the price of a fast-food lunch. So for folks who desire to dabble in cryptocurrencies, Shiba Inu Coin provides a low-cost avenue.
What Would be the Risks of Shiba Inu Coin?
It’s important to consider that cryptocurrencies themselves certainly are a risky asset class; within that asset class, speculative altcoins such as Shiba Inu Coin tend to hold even more risk. It’s only worth considering for investors with maximum tolerance for risk.
“Cryptocurrencies, and digital assets in general, are still very much in a nascent stage of development,” says Jahon Jamali, chief marketing officer with Sarson Funds. “Much like any emergent technology, there will be more losers than winners.”
With Shiba Inu Coin, and just like other cryptocurrencies, volatility seems to be probably the most apparent risk.
Tatibouet says the meme token frenzy isn’t more likely to last long, leaving the prospect of some investors to see sudden losses if interest starts to fade. Dogecoin’s recent dip is a great example, as its price plummeted right after Tesla (ticker: TSLA) CEO Elon Musk – who frequently posts bullish tweets about Dogecoin – hosted “Saturday Night Live” in early May.
“(Shiba Inu’s) price could certainly go higher, but it could in the same way easily come down, bringing many investors with it,” says Ben Weiss, CEO of CoinFlip.
How Can Investors Decide?
While it could sound boring, doing your homework is one of the best methods to hedge against making a bad investment, whether in the cryptocurrency market or elsewhere.
“Thorough research is a must if you’re looking at buying any cryptocurrency,” Tatibouet says. “Investing on an impulse has ended in tears for many.”
For crypto investments, the research includes checking coin supply and reading white papers. Weiss, for his part, recommends gathering sentiment from a variety of sources.
Patience is also key.
“Don’t invest in obtaining rich quickly; purchase things you think is going to be successful in the long run,” Weiss says. “There exists a saying in the stock market, and from what I’ve seen, it certainly means crypto:’Time available in the market beats timing the market.’ “