Investors and other speculative pundits who believe in Shiba Inu (CCC:SHIB-USD) are simply hoping. They’re hoping that the meme token can evolve into a project with real utility. They’re hoping that the still-small number of merchants who accept SHIB will continue to grow.
They’re also hopeful that the so-called SHIB Army will continue to inflate demand. If these things happen, then there’s a very slight possibility Shiba Inu will actually build something with staying power.
The problem is that it simply seems unlikely at this point. The coin is still a traders tool and little more. That’s why I suggest treading carefully. Because at the end of the day, Shiba Inu is wildly volatile. Unless the company behind it truly builds utility it will continue to do what it has done since late October. That’s a good place to start in convincing yourself to stay away from Shiba Inu.
The allure of Shiba Inu is that it caught fire this year. It has appreciated in price by an unfathomably high 33,000,000%. There’s really no pinpointing a logical reason for this to have happened. But it did, and because of that, people have made massive amounts of money.
That has created the SHIB Army — a group of backers who relentlessly champion the token, which serves to boost its price. So, although Shiba Inu is questionable at best, it has appreciated in price and that inevitably creates curiosity which leads to demand.
But here’s the thing: yes, Shiba Inu has drastically appreciated in price over the last year. But it’s clear that the market is now questioning its utility. They’re beginning to understand that SHIB doesn’t have anything behind it.
Based on its price chart, that probably began in late October. Shiba Inu has fallen steadily since then. In fact, it has shed roughly 55% of its value.
That’s the greater narrative: Shiba Inu is a trading tool that is more likely to burn you badly now rather than reward you richly. The only way that will change is if Shiba Inu becomes more useful.
Growth in Utility
Shiba Inu, like all cryptocurrency, has to become more widely accepted if it truly is the future of money. The end goal would be something akin to it acting as fiat currency. That means everywhere you go, you’d see crypto as legal tender for everything. Even Bitcoin (CCC:BTC-USD) has a long road ahead toward that goal. And Shiba Inu has much farther to go.
Recently, Canadian medical service provider Ask The Doctor disclosed that it will accept Shiba Inu as payment from its partners. The firm purchased $1.5 million worth of Shiba Inu in preparation for the transition. To some, this is a great sign. But I wouldn’t put much stock into it.
Ask The Doctor is simply a leading edge first adopter. They were the first Canadian healthcare company to adopt Bitcoin back in 2016. That might make one wonder whether Ask The Doctor is prescient given Bitcoin’s rise since. The market reaction thus far indicates that it doesn’t mean much as SHIB has fallen.
Electronics retailer Newegg Commerce (NASDAQ:NEGG) announced on Nov. 29 that it, too, would begin accepting SHIB for payments. Only time will tell if Newegg Commerce and Ask The Doctor are visionary companies far ahead of the curve. That’s Shiba Inu; it’s either the next big thing or a strange sign of the times piggybacking on a legitimate blockchain technology revolution.
What to Do About SHIB Stock
I personally believe blockchain will be one of the dominant themes of economics for a long time to come. However, I don’t think Shiba Inu deserves any mention in that conversation.
SHIB remains a traders’ tool that will continue to face a slow death unless a drastic turnaround occurs. A few companies accepting Shiba Inu does not signify such a change.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.