Shiba Inu has seen a meteoric rise in 2021 and has been listed as the top performing altcoin of the year going into December. Whether it retains that status by the end of this month is an open question however.
#1. The top performing altcoin of 2021…so far
Tracking from the start of the year, Shiba Inu put on more than 121,000,000 percent return. It made some investors millionaires from virtual pocket change this year. It was what dreams are made of. The coin peaked in October however and is now showing signs that it might be running out of steam.
Shiba Inu has demonstrated that you can simply copy the Dogecoin theme of a dog and a coin with little real world use, and still see your holdings go to the moon. That’s the kind of crazy world we are living in right now.
#2. Virtual zero real world utility
Shiba Inu is a purely speculative instrument. Sure, you can earn some kind of yield from it on the ShibaSwap platform, but with only 400 or so merchants currently taking it, the coin looks to us more as a pure punt play. Its creators probably recognise this, hence their efforts to cast around for some level of utility. One of our prime considerations when looking at coins like this is whether it really adds value other than being just a crazy gamble. Shiba Inu needs to find this, and now.
So there was the announcement from AMC Entertainment CEO Adam Aron on an earnings call that his company was considering accepting payment in SHIB tokens, but we reckon AMC will test the water with Bitcoin first. Shiba Inu’s developers are groping around for a role it could play in gaming or indeed in the metaverse. Right now they seem quite desperate to find that role, because with the price slipping, coin owners may be preparing to jump ship.
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#3. Price driven by availability – and hype
There have been a number of factors underpinning the success of the coin. Apart from the obvious hype, availability has also helped its value. Just the spectacular price rise (and fear of missing out) has been enough to get many traders involved, as there simply has not been another asset that could match returns like this. More crypto exchanges started to offer it this year which meant more punters could get into it, driving the price even higher.
In July we saw the launch of ShibaSwap, which is Shiba Inu’s own decentralised exchange, operating on the Ethereum network. This allowed owners of Shiba Inu to also make some passive income on top of the outstanding price action they were seeing.
#4. It is a speculator’s coin
Traders are in and out of Shiba Inu all the time; most traders are not hanging onto the coin for the longer term, which means it represents truly hot money. But it still has over one million owners.
The yield-driven characteristics of the ShibaSwap opportunity seem designed to bring additional value to the idea of just holding your coins and making some extra income from them. But the fear for many early adopters who have already made fat profits on this trade, is what happens if it goes back to where it came from, i.e. to zero? Is there enough fundamental utility here to keep the coin buoyant?
#5. Shiba Inu is making a push into gaming
Getting back to the utility of Shiba Inu, its founders are trying to create a role for the coin. As Jeff Gao, CEO of Cypherpunk Holdings, mentioned on our podcast recently, there is going to be a demand for coins within the next generation gaming ecosystem. Could Shiba Inu play a role in this?
Shiba Inu is starting to look more like a company and less like a coin, as it has tapped William Volk, the ex-vice president of technology for Activision, to advise it on how to get traction in the gaming field. If it can crack this, and it is a big if, then it could have a more interesting role to play going forward. The clock, however, is ticking on this one.