The cryptocurrency market has exploded over the past year, but no cryptocurrency has had such a wild ride as Shiba Inu (CRYPTO:SHIB). Its price is up more than 364,008% over the past year, even despite two substantial declines.
Although the Shiba Inu has seen a decline since its all-time high at the end of October, it has made a strong comeback recently, rising nearly 44% in the past two weeks.
Although it may be tempting to jump on the Shiba Inu bandwagon, it is still a risky investment. If there’s a reason you can consider to buy now, there are also good reasons to avoid it.
Pros: Why might the Shiba Inu be the right investment for you?
Shiba Inu may be risky, but it’s hard to argue with his growth. Read also: Crypto Cardano (ADA): Promising signs, the cryptocurrency market has an upward trend.. Cryptocurrency developers are also working to give Shiba Inu more real-world utility, which could help it grow in popularity.
For example, Shiba Inu is going to venture into the metaverse with his new project, Shiberse. Although little is known about the upcoming project, the metaverse is one of the hottest investing topics right now. Expanding into the metaverse might help Shiba Inu stay on the radar.
Additionally, the developers are working on Shibarium, a blockchain update that could lead to lower transaction fees across the entire Shiba ecosystem. Although the update is not expected before the end of the year, it could help make Shiba Inu a crypto-money more affordable and more accessible.
Of course, these updates and extensions do not warrant that Shiba Inu will continue to develop. But if you have the money to spend and are willing to take more risks for the chance to earn more, Shiba Inu might be the investment for you.
The cons: why it’s best to avoid the Shiba Inu for now
Although Shiba Inu has made more and more progress in becoming a stronger cryptocurrency, it still struggles to measure up to its competitors. See also: Ethereum Targets $3,500 After ETH Price Rebounds 40%.
Shiba Inu is, at its core, a currency of payment. It is used as a form of exchange, and its blockchain does not allow decentralized applications (dApps) like non-fungible token markets (NFTs) or decentralized finance (DeFi) projects.
This makes it difficult to compete with larger networks like Ethereum (CRYPTO:ETH), Solana and Cardano, which all allow dApps. Considering that NFTs and DeFi are some of the fastest growing markets in the crypto space, this puts Shiba Inu at a disadvantage.
Its main use being the paymentits main competitor is bitcoin (CRYPTO:BTC). Although Shiba Inu has gained substantial market share over the past year, it is nowhere near Bitcoin. Bitcoin has a market cap of over $800 billion, while Shiba Inu currently sits at around $16 billion.
If Shiba Inu wants to become a real competitor in the cryptocurrency market, it will need more utility. Although it is a step in the right direction, it might not be enough to keep up with stronger cryptocurrencies.
Its growth is based mainly on hype
Perhaps the biggest risk of investing in the Shiba Inu is that it has been heavily hyped in the past. It was originally created as a parody of Dogecoin, and it only started to develop real-world uses after it grew enormously. Read also: Cryptocurrency Price Prediction: Price Analysis from Polygon, Axie Infinity and Crypto.com.
This is a stark contrast to cryptos like Bitcoin and Ethereum, which were created to solve specific problems. Shiba Inu rose to fame during the cryptocurrency craze last year, and its meteoric growth was mainly due to retail investors buying in droves to drive the price up, only to sell shortly after and make a quick profit.
Another concern with Shiba Inu is that just 10 accounts control nearly 65% of all coins in existence. And over 81% of all coins are held by just 100 accounts. If one of these large accounts sells their parts, this could lead to massive waves of volatility.
If the Shiba Inu has advantages, it is not suitable for everyone. It’s one of the riskiest cryptocurrencies, so make sure you know what you’re getting into if you decide to buy. With a little research and preparation, you can determine if Shiba Inu is the right choice for you.