Shiba Inu Takes To The Sky: Is This The Best Cryptocurrency To Buy Right Now?
Shiba Inu Takes To The Sky: Is This The Best Cryptocurrency To Buy Right Now?

After a tumultuous 2022 that saw crypto asset prices plummet, the cryptocurrency market has come roaring back in the past 14 months. Given this favorable backdrop, it’s no surprise that some of the most speculative tokens are on the upswing.

Take a look at the dog-themed meme token shiba inu (SHIB -0.33%). Yes, it remains 64% below its peak price since October 2021. But as of March 13, the digital asset has skyrocketed 238% in the past month alone.

Given this powerful momentum, perhaps supporters hope better days are ahead. Is Shiba Inu Top Cryptocurrency To Buy Right Now?

It’s quick

The rise of the Shiba Inu coincides with the rise of its inspiration, Dogecoin, which has more than doubled in the past month. Another more inconspicuous token called PEPEwhich is not even a year old, jumped as much as 700% during the period.

While it’s impossible to know exactly what’s causing these price spikes, we can point to one factor that may be contributing to buyer excitement: the monstrous success of the new location Bitcoin exchange traded funds (ETFs). The regulatory approval of these long-awaited financial instruments lends a certain level of legitimacy to the entire asset class. Perhaps investors are hoping for more crypto ETF approvals to happen.

Since Shiba Inu is considered one of the most speculative cryptocurrencies, it makes sense that its price would jump quickly. Once the early buyers get in, the price increase gets more attention, creating a positive feedback loop. This impulse can be a powerful force until it ends unpredictably.

Be careful

As mentioned, the Shiba Inu is still well off its peak price. This setup can be extremely attractive to risk-seeking investors. However, I believe it would be a mistake to buy this token.

Building on Ethereum blockchain should in theory add much more functionality in terms of decentralized applications such as irreplaceable tokens and decentralized financial protocols. However, the Shiba Inu has not received many adoptions. And there isn’t an extensive network of developers working to improve its usefulness. This does not bode well for the Shiba Inu’s future.

In other words, there are no compelling reasons to want to own this token other than the hope that it can continue to rise in price in short speculative bursts. This is what is called a gamble because the buying proposition is not based on the fundamentals of the asset nor on logical thinking.

Better options

Investors looking to allocate some of their portfolio to the crypto space have better options. The fact that Shiba Inu is developed on the Ethereum blockchain points to the latter’s position in the industry.

Ethereum was the first blockchain network with functionality for smart contracts, a feature that adds the ability for much larger use cases over time. Ethereum has a huge network of developers and a set of planned technical upgrades that give it a better chance of long-term success than Shiba Inu.

There is also bitcoin. The world’s most valuable cryptocurrency by market cap is up 330% since the start of 2023. But there may be more room to run as more and more institutional capital pours into it. And because of its decentralized nature and fixed lifetime supply cap of 21 million coins, many market participants see it as a new-age store of value.

It is best to forget about the Shiba Inu. The meme token has its 15 minutes of fame. But it’s not a smart place to park your hard-earned savings.

Neil Patel and his clients have no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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