Ethereum whales have lately been flocking to last year’s star meme token: Shiba Inu ( SHIB -0.75% ). Though the cryptocurrency has slipped by 33% year to date, it did soar by a mind-boggling 45,000,000% in 2021.
With big holders of Ethereum turning their attention to Shiba Inu, is a rebound ahead? Should you join those whales and dive into this attention-getting cryptocurrency now?
Image source: Getty Images.
The biggest holders
First of all, “whales” are investors who own a great deal of cryptocurrency. In this case, we’re talking about those who specifically hold Ethereum. Bitcoin and Ethereum may be the biggest and best-established cryptocurrencies, but new tokens keep being launched at a rapid pace, and the list of them now exceeds 18,000.
Today, Shiba Inu is the third-biggest holding among Ethereum whales, according to WhaleStats, a website dedicated to following the 100 largest Ethereum wallets.
It’s clear that Shiba Inu may hold some attraction due to its extremely low price. Even after 2021’s massive gains, it trades for less than $0.000023 — not even a hundredth of a cent. A valuation this low opens up the door to a wide range of investors. And if more and more people buy Shiba Inu, holders of the tokens could make more and more of a profit. So, the whales may be betting on Shiba Inu’s ultra-low price to again attract investors as it did for much of last year.
Whales also might be betting on two potential catalysts. This year, Shiba Inu plans to launch a layer-2 scaling solution and enter the metaverse.
First, let’s review that scaling solution, called Shibarium. Right now, as a token on the Ethereum blockchain, Shiba Inu faces the same problems that Ethereum does: high transaction costs and network congestion. Once Shiba Inu tokens migrate to Shibarium, these issues should be a thing of the past. As for the metaverse, Shiba Inu recently said it will start selling virtual land there soon. It hasn’t yet revealed the name of its metaverse project — but it has promised to do so soon.
A short-term boost
Both of these projects could give Shiba Inu a boost. And if they’re successful, gains could happen at certain points down the road.
Now let’s get back to our question: Should you follow the Ethereum whales and invest in Shiba Inu? Like any cryptocurrency, Shiba Inu will have its share of good days and bad days. There’s always the possibility you could buy at the right moment, see its value rise on positive news about Shibarium, for example, and then sell your tokens for a profit.
But I’m looking at the question from a long-term investment perspective. And from there, the view isn’t as bright. Shibarium and the metaverse project are positive efforts. But they aren’t enough to help Shiba Inu stand out from rivals. Many other players already are reshaping the worlds of business and entertainment. They are running decentralized applications (dApps) across industries. Through these, people can buy insurance, lend money, or invest.
Shiba Inu’s main uses are for trading, staking, and payment at a limited number of merchants — and there’s nothing to indicate that will change any time soon. This means there isn’t a concrete reason to believe Shiba Inu will be among tomorrow’s crypto winners. And that’s why, as the Ethereum whales dive into Shiba Inu, the rest of us would be better advised to watch from the water’s edge.
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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