Shiba Inu (CRYPTO: SHIB) has amassed a following among a certain group of cryptocurrency enthusiasts who value community and follow the hype. It probably helps that Shiba Inu’s price has climbed astronomically since its launch in August 2020, despite the extreme volatility.
As of April 17, this meme token is trading for a gut-wrenching 87% below its all-time high. That record was established in October 2021, at the tail end of a strong run for both stocks and cryptocurrencies. Speculative investors could be eyeing the current situation as an opportunity to be more aggressive.
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But is Shiba Inu a better buy than Bitcoin (CRYPTO: BTC), the world’s oldest and most valuable cryptocurrency, right now? It’s time to compare the two digital assets.
Shiba Inu currently carries a market cap of about $7 billion. To its credit, a Layer-2 scaling solution called Shibarium was launched to enable faster and cheaper transactions. There are also metaverse updates in the works.
Although it has a relatively large market value, the cryptocurrency doesn’t have any competitive strengths. It was built on top of the Ethereum network, meaning it doesn’t stand out from a technical perspective. And according to venture firm Electric Capital, Shiba Inu doesn’t even crack the top-100 list of cryptos with the most developers working on them.
Given that there are more compelling blockchains out there, especially for decentralized applications, Shiba Inu’s real-world utility probably isn’t anything to write home about. For example, the network had just $10 million in total value locked on ShibaSwap, its decentralized exchange. That places Shiba Inu 138th on the list of DeFi protocols.
The price has moved based on various hype cycles, which presents a very risky proposition for true investors. Crypto industry observers will point out that perhaps having a strong fan base counts as having fundamental value, as cryptocurrencies depend on their communities of supporters to keep them relevant. This argument is valid, I think, but eventually the excitement will fade away unless there are positive developments.
We’re seeing this play out right before our eyes. Shiba Inu’s price has experienced some short-lived run-ups in the past year or so. These were followed by drastic price declines. The fact that the token continues to trade substantially below its peak is an indication that investors are losing interest.
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