Until recently, the stock market was enjoying one of the strongest rallies in history after a bear market. It took just over a year for the benchmark S&P 500 to double in value from its intraday low. But compared to the cryptocurrency space, stock gains look like peanuts.
Since the pandemic low of March 2020, the global value of digital currencies has catapulted nearly $1.6 trillion, translating into a movement of more than 1,100%. While Bitcoin and Ethereum, which account for around 62% of the total value of the cryptocurrency market, are responsible for a significant portion of this increase in face value, it is lesser-known coins like Shiba Inu that have is attracting crowds of new cryptocurrency investors.
Shiba Inu’s historic gain has attracted new crypto investors.
If you’re wondering “Why Shiba Inu?”, look no further than his staggering performance last year.
On January 1, 2021, a single SHIB token could be purchased for the microscopic sum of $0.000000000073. But in less than 10 months, those same coins will hit their all-time high at $0.00008841. Subtracting six zeros after the decimal, SHIB achieved a record intra-year gain of over 121,000,000%. In other words, by investing $1 at midnight on January 1, 2021, you would have become a millionaire, starting from the peak of SHIB on October 27.
Even taking into account that Shiba Inu sold off significantly at the end of 2021, it is unlikely that we will ever see an annual gain of around 46,000,000% again for a crypto asset. Life-changing gains like this are more than enough to attract new investors.
Of course, Shiba Inu had help. For example, the dynamics of the cryptocurrency market contributed to the success of this hitherto unknown token. While it’s relatively easy to bet against stocks by shorting stocks and/or buying derivatives (like put options), those same tools don’t necessarily exist in the cryptocurrency space. With the exception of bitcoin, there are no derivative options for betting against lesser-known digital currencies. What’s more, not all cryptocurrency exchanges allow short selling. All of this created a natural buying bias that Shiba Inu fully exploited.
Greater visibility didn’t hurt either. A number of cryptocurrency exchanges chose to list SHIB last year. Coupled with the July launch of decentralized exchange ShibaSwap, this has created a scenario where exchange liquidity has improved drastically in a very short time frame.
Can Shibarium and metaverse talk push SHIB to $0.0001 by the end of 2022?
But according to Shiba Inu’s more than 1.14 million unique holders, their token could deliver a new performance in 2022 (and beyond). If a new gain of 46,000,000% is not on the agenda, an almost fivefold increase in value to $0.0001 – SHIB tokens are changing hands at $0.00002064 as of this writing – could be possible by the end of the year.
The biggest catalyst in 2022 is the expected public launch of the in-house developed Tier 2 blockchain project, Shibarium.
Without going into technical details, Shiba Inu is a token built on the Ethereum blockchain. Although Ethereum is a very reliable blockchain, being tied to this popular network means having to deal with Ethereum’s high transaction fees and occasional processing delays. Shibarium’s goal is to drastically reduce transaction fees to make it more economical to use SHIB as a form of payment.
As of now, no launch date has been set for Shibarium. However, it was reported earlier this year that Shibarium was undergoing a second round of private testing. It is still expected to be ready for its public launch in mid-2022, which is fast approaching.
Shibarium is key to the development of the Shiba Inu ecosystem. The project developers previously announced that they plan to create blockchain-based games and sell digital plots of land, called “Shiba Lands“, in its own iteration of the metaverse. These Shiba lands, as well as characters from blockchain-based games, will be stored as non-fungible tokens (NFTs). For an NFT market to thrive, transaction fees need to be minimal, hence the importance of successfully launching Shibarium as soon as possible.
Considering that Shiba Inu has been one of the most searched cryptocurrencies in the United States in 2021, it cannot be excluded that social networks give SHIB a boost by making him eat another zero.
Shiba Inu’s “show-me” moment may disappoint.
However, virtually all signs and data points suggest that the chances of Shiba Inu reaching $0.0001, let alone ending the year there, are extremely low.
The most glaring problem with Shiba Inu is that it does not stand out from thousands of other innovative cryptocurrency projects. As an ERC-20 token built on the Ethereum blockchain, SHIB is, ultimately, nothing more than a payment coin. Its market value is surrounded by other projects that offer smart contracts and the ability to develop decentralized financial and non-financial applications. Without game-changing utility, it’s hard to imagine Shiba Inu remaining relevant in the long run.
Shiba Inu is not even a particularly popular or important payment currency. The Cryptwerk online business directory lists only 659 merchants that accept SHIB as payment, and the vast majority of these merchants are unknown. Given Shiba Inu’s high transaction costs and increased volatility, it is unlikely that many merchants will be willing to accept it as payment.
Another reason to be skeptical of Shiba Inu is the rapidly declining interest in NFTs and metaverse investments. Between mid-January and mid-April, Google Trends search interest in the term “NFT” decreased by 65%. Not to be outdone, search interest in the term “metaverse” is down almost 75% since the end of October. After the launch of Shibarium, chances are Shiba Inu games and metaverse projects will disappoint.