Shiba Inu Is Skyrocketing: Is It a Top Cryptocurrency to Buy Right Now?
After a tumultuous 2022 that saw crypto asset prices tank, the cryptocurrency market has come roaring back in the last 14 months. With this favorable backdrop in mind, it's not surprising that some of the most speculative tokens are on the way up.
Look at dog-themed meme token Shiba Inu (CRYPTO: SHIB). Yes, it remains 64% off its peak price from October 2021. But as of March 13, the digital asset has skyrocketed 238% in just the last month.
Given this powerful momentum, perhaps supporters are hoping there are better days ahead. Is Shiba Inu a top cryptocurrency to buy right now?
Quickly rising
Shiba Inu's rise coincides with the ascent of its inspiration, Dogecoin, which has more than doubled in the past month. Another more under-the-radar token, called PEPE, which isn't even one year old, has soared by a whopping 700% in the period.
While it's impossible to know exactly what is causing these price spikes, we can point to a factor that is perhaps adding to buyers' excitement: the monster success of the new spot Bitcoin exchange-traded funds (ETFs). Regulatory approval of these highly anticipated financial instruments lends a certain level of legitimacy to the entire asset class. Maybe investors are hoping for more crypto ETF approvals to happen.
Because Shiba Inu is viewed as one of the most speculative cryptocurrencies out there, it makes sense that its price can surge rapidly. Once early buyers get in, the price increase attracts more attention, creating a positive feedback loop. This momentum can be a powerful force, until it unpredictably ends.
Practice caution
As mentioned, Shiba Inu is still substantially off its peak price. This setup could be extremely enticing for risk-seeking investors. However, I believe it would be a mistake to buy this token.
Being built on top of the Ethereum blockchain should, in theory, add a lot more functionality in terms of decentralized applications, like non-fungible tokens and decentralized finance protocols. However, Shiba Inu hasn't really gained much adoption. And it doesn't have an extensive developer network working to advance its utility. This doesn't bode well for Shiba Inu's future.
In other words, there are no compelling reasons to want to own this token except for the hope that it can continue rising in price in short speculative spurts. This is what's called gambling, as the buy thesis is not based on the asset's fundamentals, nor on logical thinking.
Better options
Investors looking to allocate a portion of their portfolio to the crypto space have better options to choose from. The fact that Shiba Inu was developed on the Ethereum blockchain points to the latter's standing in the industry.
Ethereum was the first blockchain network with functionality for smart contracts, a feature that adds the possibility for much greater use cases over time. Ethereum has a huge developer network and a pipeline of planned technical upgrades that give it a higher chance of long-term success than Shiba Inu.
There's also Bitcoin. The world's most valuable cryptocurrency by market cap has climbed 330% since the start of 2023. But it could have more room to run as larger and larger amounts of institutional capital flow into it. And because of its decentralized nature and its fixed lifetime supply cap of 21 million coins, many market participants view it as a new-age store of value.
It's best to forget about Shiba Inu. The meme token is having its 15 minutes of fame. But it's not a smart place to park your hard-earned savings.
Should you invest $1,000 in Shiba Inu right now?
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Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Shiba Inu Is Skyrocketing: Is It a Top Cryptocurrency to Buy Right Now? was originally published by The Motley Fool
