Cryptocurrencies have undoubtedly made some fortunate and daring early adopters extremely wealthy beyond their wildest imaginings. Shiba Inu, for example, grew more than 20 million percent in 2021, which has to be the single greatest one-year gain in financial history. It follows the same pattern as a lot of other digital assets: it is the result of huge speculation more than anything else. Furthermore, it is doubtful that it will ever be matched again.
Despite that remarkable return, the Shiba Inu is currently down 89% from its high (as of June 29). And while it may appear to be a good investment opportunity, SHIB is one of the cryptocurrencies that you should avoid no matter what.
No competitive edge
Shiba Inu is an ERC-20 token, which means it runs on the Ethereum (CRYPTO: ETH) blockchain and was launched in August 2020 as a dog-inspired alternative to Dogecoin. As a result, SHIB is interoperable with the whole Ethereum ecosystem, but it offers no significant distinction from other ERC-20 tokens in terms of functionality. Shiba Inu lives on top of Ethereum, so it has the same technical requirements as the platform. As a result, for users or developers, it doesn’t stick out from the crowd.
Examine the price of Bitcoin with those of its rivals. With a first-mover advantage and worldwide recognition, bitcoin (CRYPTO: BTC) is gradually becoming acknowledged as a real store of value. And, with the implementation of the Lightning Network, Bitcoin’s potential to be adopted as a genuine decentralized internet currency isn’t out of the question.
The only reason someone would buy SHIB today is because of speculation, as there is no real competitive edge in the crowded market of tens of thousands of cryptocurrencies. It’s similar to playing a table at a casino and betting on something with an incredibly small likelihood of success. Many people are hoping SHIB will have a significant price rise, similar to what it did in the summer of 2021 when the meme-stock craze boosted certain digital assets to new heights. This isn’t a good financial strategy.