Dating back longer than any American today has been alive, the stock market has provided the juiciest return potential for investors. It may not be the top-performing investment vehicle every year, but it handily outperforms bonds, gold, oil, housing, and other investment classes on an average annual return basis over the very long run.
However, the short-term is a completely different story.
Since the coronavirus crash trough in March 2020, the benchmark S&P 500 has gained a bit over 100%. Meanwhile, the aggregate value of cryptocurrencies has catapulted higher by roughly a factor of 19 to $2.65 trillion. In other words, digital currencies have lapped stocks many times over in the past 20 months.
Although crypto’s “Big Two,” Bitcoin and Ethereum (CRYPTO:ETH), have played a key role in this nominal value gain, no digital currency has been hotter than meme coin Shiba Inu (CRYPTO:SHIB). If you own SHIB tokens or have considered buying Shiba Inu coin, here are three numbers you’re going to want to know.
The first number to know is one that’s going to get a lot of folks excited. This 9,144,998% figure represents the aggregate return for SHIB tokens since it printed a trade at $0.00000000051 on its debut day (Aug. 1, 2020), through very late evening on Nov. 20. Put another way, Day 1 investors with the luck, stomach, and wherewithal to hang onto their investment could have turned $11 into about $1 million.
The reason this number is so important is it demonstrates how powerful the fear of missing out (FOMO) can be in the crypto space. Crypto investors have watched Bitcoin gain, at one point, more than 8,000,000,000% from its July 2010 debut, and are therefore willing to chase high-flying digital currencies with the notion that anything is possible.
This enormous 15-plus month gain is also responsible for the rapid growth in the Shiba Inu community. According to data from Etherscan, more than 986,000 unique wallet addresses held SHIB tokens, as of Nov. 20. For context, 729,000 unique wallet addresses had a stake in SHIB, as of Oct. 14. In five weeks, the “SHIBArmy” has grown by 35%.
It’s also worth noting that such enormous gains are possible because short-selling Shiba Inu coin is difficult on most crypto exchanges. Whereas plenty of derivative options exist to bet against Bitcoin, it’s not nearly as easy for investors to bet on downside for Shiba Inu. This has created something of a buy bias.
On the other hand, another figure current and prospective SHIB owners should acquaint themselves with is 138. This represents the number of global merchants that accept SHIB tokens as a payment, according to online business directory Cryptwerk.
To be brutally honest, cryptocurrency, as a whole, has minimal utility worldwide. But among the world’s 12-largest digital currencies, Shiba Inu’s usage is laughably low. There are more than 32 million businesses in the U.S. and beyond 500 million entrepreneurs worldwide — yet only 138 of these businesses are willing to accept Shiba Inu coin.
I will note that Shiba Inu did land its very first well-known merchant this month. Movie theater chain AMC Entertainment (NYSE:AMC) plans to incorporate SHIB as an online payment option by the first quarter of 2022, per AMC CEO Adam Aron. This move comes on the heels of more than 87% of the 153,100 respondents to Aron’s late October Twitter poll voting in favor of adding SHIB as a payment option.
However, this big “win” for Shiba Inu is probably more symbolic than useful. As an ERC-20 token, Shiba Inu was built on the Ethereum blockchain. This means it’s tethered to the high transaction fees and lag times that can occasionally accompany the Ethereum network. Between these high fees and the fact that using crypto to buy goods and services is a taxable transaction, it’s unlikely that Shiba Inu is used much, if at all, to buy AMC tickets or gift cards.
3. 93% to 99%
Perhaps the most important number current and prospective investors need to know is this range of 93% to 99%. What this represents is the typical peak-to-trough decline for high-flying payment coins, based on the research I’ve done.
For instance, the following five payment coins or payment network protocol tokens soared in a relatively short time frame:
- Nano gained more than 461,000% in under 10 months.
- NEO soared close to 164,000% in 13 months.
- XRP surged over 62,000% in a little over 10 months.
- NEM catapulted more than 57,000% in just over a year.
- Litecoin rallied almost 25,000% in 30 months.
But once these payment coins hit their respective peaks after delivering life-altering gains, they saw a massive reversion.
- Nano shed 99% of its value in 26 months.
- NEO dumped 97% of its value in just shy of a year.
- XRP fell by 96% in 26 months.
- NEM lost 98% of its value in 13 months.
- Litecoin declined by 93% in a year.
With sentiment consistently the key driver of digital currencies, a shift in the way investors view SHIB could send it screaming lower in a very short time frame. In fact, SHIB has already experienced a loss of 50% from its Oct. 27 high. If history is any predictor of the future, Shiba Inu’s lack of competitive edge makes it a perfect candidate to eventually lose 93% to 99% of its value.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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