Shiba Inu price has been disappointing lately. It has crashed by more than 75% from its all-time high, giving it a market capitalization of more than $12 billion. As a result, it is the 15th biggest cryptocurrency in the world. A common question among traders is whether Shiba Inu is a good investment. In this article, we will explain why we believe that SHIB is a good investment.
SHIB is an ERC-20 token
Shiba Inu is known for its association with Dogecoin. Indeed, the coin was created with the aim of becoming a better alternative to Dogecoin. However, the two pieces are radically different. For one, DOGE is built from the ground up using proof-of-work technology. Its foundation is similar to that of Bitcoin, which means anyone can mine it.
However, Shiba Inu is an Ethereum Request for Comments (ERC-20) token. An ERC is the smart contract standard for building on Ethereum. As a result, Shiba Inu does not have its underlying technology, meaning that it uses the one provided by Ethereum.
This is a good thing considering that Ethereum is now in an upgrade period where its developers are moving it from a proof-of-work platform to a proof-of-stake platform. The merger of the Beacon chain and the current Ethereum will take place in the third quarter of 2022. Therefore, this merger will make Shiba Inu faster and more user-friendly.
Shiba Inu is not just a meme coin
One of the top concerns that many people have about Shiba Inu is that it is a network without any utility value. While this was the case when it was started, things have changed dramatically in the past few months. Its developers have increased its utility as they seek to make it a more useful platform.
One of the most useful products is known as ShibaSwap. It is a decentralized finance (DeFi) platform that allows people to trade tokens, buy and sell non-fungible tokens, and even invest for returns.
ShibaSwap is a relatively young product that has a total value locked (TVL) of over $70 million. Therefore, there is a likelihood that the Shiba Inu price will keep growing as this ecosystem grows. There is a possibility that it will grow because of how popular Shiba Inu is among traders.
Therefore, we believe that Dogecoin and Shiba Inu have a similar relationship to Ethereum and Binance. While Bitcoin is primarily used for payments, Ethereum has additional utility value.
It is possible to stake Shiba Inu
Staking is a process where an investor is able to earn a return for simply depositing their coins in an exchange. Because of how it is built, it is not possible to stake Dogecoin. But it is possible to earn a return by staking Shiba Inu.
One of the easiest ways to get these returns is to use Shiba Swap. To do this, simply visit the website then select bury. The idea is that when you bury your SHIB, you will earn proportionally to your contribution to the prize pool.
After staking, you will receive xSHIB which represents your share of the return. These rewards are then distributed every week. At the time of writing, the APY for staking Shiba Inu is 5.50%, which is a reasonable amount.
Shiba Inu are known for their comebacks
Another reason we think Shiba Inu is a good investment is because the piece is known for its returns. When Shiba Inu launched, its price initially spiked to $0.000040. At the time, most people equated it with Dogecoin, which was having its best time then.
However, these gains were short-lived as the coin crashed by more than 90% and reached an all-time low of $0.0000055. At the time, most people, including myself, believed that the coin had collapsed. This changed in October 2021 when the coin rallied to an all-time high of $0.000090. This means that the coin can always make a comeback.
History is full of coins that have fallen sharply and then rebounded. For example, in 2020 Bitcoin fell from over $13,000 to $3,500 when the Covid-19 pandemic started. While most people expected its price to continue crashing, it rebounded and reached an all-time high of nearly $70,000.
Shiba Inu crash is not isolated
Further, Shiba Inu is a good investment because its current crash is not an isolated case. For one, most coins have been in a downward trend for months as worries about the hawkish Federal Reserve continue. Notably, other assets like stocks have also crashed hard, with the Nasdaq 100 falling by more than 10% from its YTD high.
So that’s a good thing because historically, strong downtrends don’t last forever. I expect Shiba Inu and the other coins to bounce back when the stock sell ends. Moreover, SHIB has an excellent risk-reward ratio due to how low it trades.
