Can Shiba Inu Reach $1?

Shiba Inu (CRYPTO: SHIB) was one of the most high-flying cryptocurrencies in 2021. Benefiting from the meme-stock craze that took hold of markets and lifted unsound businesses like GameStop and AMC Entertainment to new heights, Shiba Inu quickly ascended to become a top digital asset.

However, this dog-inspired meme token is currently 92% below its all-time high. Some believers hope that it can one day bounce back and reach $1, which translates to a whopping 13,760,000% rise from today’s levels. Is this even remotely possible? Let’s take a closer look.

Where’s the competitive edge?

I believe that the long-term viability of any cryptocurrency rests solely on its ability to bring about real-world use cases. While the entire asset class has become more prominent in the past few years, now valued at roughly $1 trillion, its ultimate survival depends on the successful transition from being a tool purely for financial speculation to having greater utility in the day-to-day lives of people across the world.

Using this framework, it’s clear to see that Shiba Inu doesn’t really have much of an edge in the world of cryptocurrencies. For starters, it was created to have more functionality than its inspiration, Dogecoin. By being compatible with the Ethereum (CRYPTO: ETH) network, Shiba Inu opens itself up to potentially greater exposure when it comes to different crypto exchanges and wallets. In theory, that should help its adoption.

But this hasn’t been the case. According to Cryptwerk, there are only 772 merchants globally that accept Shiba Inu tokens as a method of payment. That’s hardly anything to write home about. Thousands of retailers accept more robust cryptos like Ethereum.

To its credit, developers have been working on a layer-2 scaling solution known as Shibarium, which was launched about a month ago. It promises to speed up transactions and lower fees, which might make the network more attractive to users. Moreover, this upgrade could pave the way for Shiba Inu to be a more popular cryptocurrency when it comes to non-fungible tokens, decentralized finance protocols, or other decentralized applications. Time will tell if Shibarium becomes a success.

Despite what seems like progress being made, it’s hard to ignore other more promising cryptocurrencies that investors might consider owning as a substitute to Shiba Inu. Of course, there’s Ethereum, the most valuable blockchain with smart contract functionality. It’s a leader when it comes to attracting developers and bringing out new applications. And its $193 billion market cap trounces Shiba Inu’s $4 billion. Investing some money into Ethereum seems like a much wiser decision.

The math doesn’t add up

Let’s say that for some miraculous reason, Shiba Inu is able to hit the $1 mark. It’s anyone’s guess when this could happen, but it equates to a monster gain from the current price. At that level, the overall market cap of Shiba Inu would total about $590 trillion, assuming the outstanding token count stays unchanged. That hypothetical value makes Shiba Inu the single most valuable entity on the face of the planet.

As of this writing, Apple, widely considered to be the most successful business of all time, carries a market cap of $2.7 trillion. Should the dog-themed crypto be worth more than a company that sells the most popular hardware and software products on Earth and that has had a huge impact on society? Definitely not.

It’s easy to get caught up in the narrative of Shiba Inu, hoping that the community will rally again and attract heightened investor enthusiasm that can push the token’s price to another level. Speculators who missed out on the crazy rally in 2021 are probably wishing that a repeat performance is on the horizon. But that’s impossible to predict with any level of certainty. And it’s no way to invest your hard-earned savings.

Let’s face it. Shiba Inu isn’t going to $1. So, it’s best to temper expectations.

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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 Apple and Ethereum. The Motley Fool has a disclosure policy.

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