Can Shiba Inu reach $ 0.01 in 2022?
If you thought stock investors had a good year 2021, take a closer look at how cryptocurrency investors fared.
In the early hours of December 31, the aggregate value of all digital currencies was $ 2.22 trillion. Based on the start of the year for the crypto market, we are talking about an increase of over 185%. Comparatively, the benchmark S&P 500 was 27% higher. Cryptocurrencies circling around the stock market have become a common theme in recent years.
Although Bitcoin and Ethereum accounted for a significant portion of the nominal market value gains of 2021, it was another cryptocurrency that captivated investors and set records.
In the stock market, a single year gain of 10,000% or more is quite rare. Meanwhile, in the cryptocurrency space, single-year gains of 100,000% or more are rare. What does it do Shiba inu (CRYPTO: SHIB) made in 2021 all the more special.
The crypto space has gone to the dogs in 2021
According to CoinMarketCap.com, investors were given the opportunity to collect SHIB tokens at midnight on January 1, 2021, for a microscopic amount of $ 0.0000000073 each. But with less than 24 hours to ring a new year, those same tokens were changing hands for $ 0.000034. It’s still a puny price per token, but it represents an increase in value of over 46,500,000%! To put this in context, it would only have taken an initial investment of $ 2.15 on January 1 to have $ 1 million at the time of this writing.
The question that probably comes to your mind is “How?” How, exactly, does an asset, cryptocurrency or not, perform a moonrise over 46,500,000% in 12 months? The answer lies in a combination of catalysts, hype and market structure.
In terms of catalysts, Shiba Inu was listed on numerous new exchanges throughout the year and launched the decentralized exchange ShibaSwap in July. ShibaSwap and the new public listings have helped improve liquidity and increase the number of SHIB holders beyond 1.1 million, according to Etherscan. The ability to wager coins on ShibaSwap to earn passive income has also encouraged longer holding periods.
When it comes to the hype, Fear of Missing Out (FOMO) has been a crucial part of SHIB’s success. With Bitcoin gaining as much as 8,000,000,000% in 11 years, Shiba Inu has had no trouble attracting inelastic buyers who aren’t afraid of a big rollback. It also happens to be one of the most sought after cryptocurrencies on the internet in the United States.
Finally, there is the market structure of the cryptocurrency space. While short sellers (i.e. beyond the two most prominent names. With limited avenues for short sellers to strike, Shiba Inu has benefited, at least temporarily, from an inherent buying bias. .
Can the Shiba Inu reach $ 0.01?
Browse through social media message boards and you will have no trouble finding SHIB supporters calling for the cryptocurrency to consume another zero after its decimal point, or even run to $ 0.01 in 2022. The question is whether Shiba Inu can really reach $ 0.01 this year?
To put it as bluntly and succinctly as possible, no.
There are four main reasons why the social media price target of $ 0.01 is nothing more than a retail investor’s fantasy.
For starters, the cryptocurrency space has over 16,200 tokens listed, per CoinMarketCap.com. To stand out, projects must offer competitive advantages and differentiation. Investors will not gain any competitive advantage or differentiation from Shiba Inu. It is nothing more than an ERC-20 token built on the Ethereum blockchain which, at the moment, suffers from the same high transaction costs and processing times that come with the Ethereum network. And I’m sorry to say it, but the social media followers and the hype don’t count as lasting differentiation.
The second problem for Shiba Inu, which builds on the previous point, is that it has virtually no use outside of a cryptocurrency exchange. The Cryptwerk online business directory lists only 394 merchants who accept SHIB as a payment method as of December 31. Additionally, 44 of these “merchants” are crypto exchanges. This means that only 350 companies worldwide actually accept SHIB as a payment method. While optimists would proclaim that Shiba Inu has to start somewhere, that “somewhere” should not represent a market value of nearly $ 19 billion when it has no real use.
A third big problem for Shiba Inu is that the story is not on his side. In the rare instances where a cryptocurrency has risen 24,000% or more in a very short period of time, the precedent has almost always been that an equally epic reversion awaits. We looked at the payment piece Nano increase by over 461,000% in less than 10 months, then lose 99% of its value over the next 26 months. Likewise, the privacy room Edge gained almost 1,200,000% in about a year, then lost 99.6% of its value. After a gain of 46,500,000%, history suggests that a massive pullback awaits.
Fourth and finally, a price target of $ 0.01 does not make sense from a valuation standpoint. With SHIB 549 trillion in circulation, even $ 0.01 would give this project a value of $ 5.49 trillion. This is roughly double the value of Apple, which would be really insulting given how little value Shiba Inu brings to the real world.
To sum up, Shiba Inu has absolutely no chance of hitting $ 0.01 in 2022.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.