Shiba Inu Coin: Worth The Investment Risk?

Shiba Inu is a decentralised, community-building cryptocurrency that was created in August 2020 by an anonymous person named Ryoshi. It is an altcoin of Dogecoin, which is itself an altcoin of Bitcoin. It has been named after the Japanese dog breed, Shiba Inu.

Shiba Inu is one of the top cryptocurrencies by market cap and recorded gains of 48,000,000% from 2020 to 2021. However, it has also been extremely volatile. Its highest price was $0.00008845 on 28 October 2021, and its lowest was $0.000000000056 on 28 November 2020.

Shiba Inu has a market cap of $21.16 billion as of early March 2024 and is currently trading at around $0.00001368.

So, is it worth investing in? Well, that's up to you. Cryptocurrencies are volatile and investing in them can be risky. But if you are willing to take the risk, Shiba Inu could be a good investment. It has a strong community, and its creators have been working on new developments, such as its own metaverse, games, a magazine and merchandise.

However, it's important to remember that past performance does not determine future success, and there are no guarantees when it comes to investing in cryptocurrency.

Shiba Inu's popularity

Shiba Inu is a popular cryptocurrency, especially among major crypto exchanges, with a dedicated online community of supporters known as the ShibArmy. Its popularity is largely due to two reasons:

• Tesla founder Elon Musk's tweets about his interest in owning a Shiba pup, which hyped the crypto market and led to a 300% price rise.
• The influence of social media hype, with online attention from prominent figures like Ethereum founder Vitalik Buterin and Tesla CEO Elon Musk.

Shiba Inu is also popular because of its strong community of supporters, who have helped the coin gain traction and success. The ShibArmy, as they are called, are dedicated to the coin and have helped to pump its price. The official Twitter account for the cryptocurrency, for instance, has 2.2 million followers, more than other top coins like Solana and Cardano.

Shiba Inu is also built on the Ethereum blockchain, which is already robust, secure, and well-established, allowing for actual decentralisation. This gives the coin credibility and makes it more attractive to investors.

Shiba Inu has also been able to differentiate itself from other meme coins, which are often considered parodies or inside jokes, by releasing a decentralised exchange and an NFT project involving the token. These projects have attracted new users and propelled the token higher.

The coin's popularity is also due to its positioning as a rival or "Dogecoin Killer". Dogecoin, which is also based on the Shiba Inu dog breed, gained popularity as a meme cryptocurrency that started as a joke. Shiba Inu has been able to ride the wave of Dogecoin's success and establish itself as a competitor, even overtaking Dogecoin in market capitalisation during the 2021 cryptocurrency bull run.

Lastly, the element of founder anonymity has also played a role in Shiba Inu's popularity. Like Bitcoin, the Shiba Inu coin was created by an anonymous person or group, which has helped dissociate the cryptocurrency from any individual and may have helped to draw in investors following the collapse of several projects due to founder issues.

The influence of Elon Musk

Elon Musk, the CEO of Tesla, has been a major supporter of cryptocurrencies, and his tweets have had a significant impact on the prices of both Shiba Inu and Dogecoin. In 2021, Musk tweeted about getting a Shiba Inu puppy named Floki, and this single tweet caused a 40% jump in the price of the Shiba Inu coin within hours. This was not an isolated incident, as Musk's tweets about his dog Floki, with a Shiba Inu logo, have positively influenced the price of the Shiba Inu coin in the past.

The influence of Musk's tweets on the cryptocurrency market cannot be overstated, and this impact has been labelled the "Elon Musk effect" by some analysts. In the case of the Shiba Inu coin, this influence was further amplified by the coin's self-proclaimed status as a "Dogecoin killer". Dogecoin, the most mainstream and valuable dog-themed coin, saw its price increase by 25% in the days following Musk's tweet about Floki.

The "Elon Musk effect" on cryptocurrency prices has been attributed to the interpretation and reaction of the crypto community to Musk's tweets. David Hsiao, CEO of crypto magazine Block Journal, stated that "mundane actions like the tweet can be overly interpreted by the crypto community, and the response can be pretty wild". This effect was further amplified by the positive sentiment surrounding Bitcoin in 2021, creating a snowball effect that caused the price of the Shiba Inu coin to skyrocket.

While the influence of Elon Musk on the price of the Shiba Inu coin is undeniable, it is important to note that this influence may not have the same staying power as it used to. Analysts have observed that the hype surrounding dog-themed coins has slowed down, and there are now other points of focus in the industry, such as decentralised finance and NFTs.

In conclusion, Elon Musk's tweets have had a significant influence on the price of the Shiba Inu coin, and his support for cryptocurrencies has likely contributed to the coin's popularity and growth. However, it remains to be seen if this influence will continue in the long term, as the focus of the crypto community may shift to other areas.

Shiba Inu's tokenomics

Token Distribution and Supply

Shiba Inu's initial distribution saw 50% of its tokens allocated to Uniswap Liquidity and the remaining 50% to Vitalik Buterin, Ethereum's co-founder. This decision was criticised as it raised doubts about the true decentralisation of SHIB and its susceptibility to future volatility. However, Buterin burned most of the tokens, removing them from circulation, and donated a substantial number to charity, including the India COVID-19 Relief Fund.

SHIB has a deflationary system, with a percentage of tokens burned after every transaction, decreasing the supply over time and increasing the value. As of August 2024, SHIB has a market cap of $21.16 billion and is ranked 13th among cryptocurrencies.

Competition with Dogecoin

Shiba Inu has positioned itself as one of Dogecoin's biggest competitors. In the previous cryptocurrency bull run, Shiba Inu briefly outpaced Dogecoin in market capitalisation and became a top 10 meme coin. Dogecoin is an inflationary token, with 5 billion new tokens entering circulation annually, diluting its value over time. In contrast, SHIB has deflationary tokenomics, with a decreasing supply over time, which should lead to an increase in price.

Developments within the Shiba Inu Ecosystem

Shiba Inu has differentiated itself from other meme coins by moving beyond the hype. Developments include the Shibarium blockchain technology, which enhances SHIB, and the Shiba Inu Metaverse, which has the potential to draw attention from gamers and others. The Shiba Inu team has also launched a decentralised exchange, a metaverse, games, a magazine, and merchandise.

Founder Anonymity

The anonymous identity of Shiba Inu's founder, Ryoshi, mirrors that of Bitcoin, dissociating the cryptocurrency from any individual. This means that the founder's issues are unlikely to impact the price direction of Shiba Inu, a factor that has drawn investors following the collapse of several projects due to founder issues.

Community Support

Like other meme coins, Shiba Inu's success is driven primarily by its community support rather than real-world utility. The large SHIB Army community and online influencers help pump the price. The official Twitter account has over 2.2 million followers, more than other top coins like Solana and Cardano.

Downsides

Shiba Inu has limited utility, with low adoption by corporations, and there may no longer be the opportunity for exponential gains. As an ERC-20 token, it is also impacted by the performance of Ethereum, which can affect investor confidence.

Shiba Inu's potential to dethrone Dogecoin

Shiba Inu has been touted as the "'Dogecoin killer'" by its team, but it is unclear if it will ever dethrone Dogecoin as the king of meme coins. However, there are several reasons why Shiba Inu could be a better investment than Dogecoin.

Firstly, Shiba Inu has proven to be a millionaire-maker. In the 2020/21 bull run, Shiba Inu recorded gains of 48,000,000%. This means anyone who invested more than $100 in SHIB in 2020 was a millionaire by the end of 2021.

Secondly, Shiba Inu has better tokenomics than Dogecoin. Dogecoin is an inflationary token, with 5 billion DOGE entering circulation annually. On the other hand, Shiba Inu has deflationary tokenomics, with nearly 50% of its total supply taken out of circulation in 2021.

Thirdly, Shiba Inu has more potential use cases than Dogecoin. While Dogecoin is designed to be a payment cryptocurrency, Shiba Inu has a decentralized exchange and a Metaverse, among other features.

Fourthly, Shiba Inu has a dedicated fanbase that could help bring the coin closer to "the moon".

However, it is important to note that Shiba Inu is highly volatile and risky, with little to no utility. Its value is based primarily on hype and speculation. Therefore, it may not be a safe investment for those risk-averse.

In conclusion, while Shiba Inu has the potential to dethrone Dogecoin, it is a highly risky investment. Investors should exercise caution and conduct thorough research before investing in Shiba Inu or any other cryptocurrency.

The anonymity of its founder(s)

Shiba Inu was created by an anonymous person or group using the pseudonym "Ryoshi". Like Bitcoin and its founder, Satoshi Nakamoto, the true identity of the creator(s) of Shiba Inu is unknown. It could be a single individual or a group of people. This anonymity is advantageous as it helps dissociate the cryptocurrency from a specific person. This means that the founder's issues may never impact the price direction of Shiba Inu. This has been a factor that has attracted investors to the cryptocurrency, especially after the collapse of several projects due to founder issues.

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