Last year, widely followed Standard & Poor’s 500 More than doubling its average annual total return over the past forty years, as well as hitting nearly six dozen record highs. However, the stock market continues to lag behind the outperformance of cryptocurrencies.
As of the very early morning of December 29, the total value of all cryptocurrencies was $2.26 trillion. In one year, the value of the crypto market nearly tripled. Despite the usual suspects, Bitcoin And Ethereum, was responsible for a large part of this increase – it makes up nearly 60% of the value of $2.26 trillion – one currency that stands head and shoulders above all others: Shiba Inu (CRYPTO: gray hair).
Shiba Inu’s 2021 movie was historic
While the crypto space has yielded some amazing short-term gains before, we’ve never seen anything quite like what the Shiba Inu meme coin produced in 2021.
According to CoinMarketCap.com, investors had the opportunity to acquire SHIB for $0.0000000000073 per token at midnight on January 1, 2021. Over the next twelve months, SHIB ate six zeros and was close to $0.000036. From December 29. All that said, we are talking about a one-year gain of close to 49.00,000,000%!
To put this in some perspective, if someone bought $2.05 worth of SHIB at midnight on January 1, 2021, and assume there were no transaction fees, they would be a millionaire at their current price per token. Relatively, it is exceptionally rare to see one-year gains above 10,000% in the stock market, and it is also rare for cryptocurrencies to achieve seven-figure returns for one year. I can mention the privacy coin edge It managed this feat in 2017 (a gain of nearly 1,200,000%), but hasn’t seen any notable coins come close since then.
How, exactly, does the value of assets go up 49.000.000% in one year? Let’s take a closer look.
Anatomy of the Moon SHIB by 49,000,000%
The most obvious reason to prove Shiba Inu unstoppable for most of 2021 was to increase its visibility. As SHIB has moved up the ranks in both popularity and market capitalization, more crypto exchanges have welcomed its inclusion. Having more exchanges to trade means better liquidity and a large shareholder base. According to Etherscan, Shiba Inu has 1.1 million individuals.
The launch of the decentralized exchange ShibaSwap in July was also a major catalyst. Apart from improving liquidity on a previously illiquid token, ShibaSwap provides the opportunity for SHIB holders to share their coins and earn passive income. The point is, ShibaSwap has encouraged investors to stick with SHIB for a much longer period of time.
Enthusiasts are also excited by the examples of SHIB adoption in the real world. cinema chain AMC Entertainment It plans to introduce Shiba Inu coin as an accepted form of online payment in the first quarter, while the tech-focused online retailer New Commerce SHIB gave the go-ahead in December.
To add to this point, there is excitement surrounding the expected launch of the second-tier blockchain project Shibarium in 2022, as well as the ongoing development of non-fungible token (NFT)-led games.
In addition, no story about Shiba Inu’s success would be complete without alluding to the fear of missing out (FOMO). After watching Bitcoin surge up to 8,000,000,000% in 11 years, crypto investors aren’t afraid of cryptocurrencies hitting an unexpected cap. These inflexible buying habits were pivotal in eliminating six zeros from their token price.
$64,000 Question: Is Shiba Inu still a purchase?
But the most relevant question has to be after 49.000.000% profit in one year, is Shiba Inu still worth buying? The answer, quite clearly, is no.
Although impatient investors have been rewarded with life-altering gains, there are three very good reasons why you should avoid Shiba Inu in 2022 (and beyond).
The most important reason investors keep their distance is Shiba Inu’s lack of competitive advantages and differentiation.
According to CoinMarketCap.com, there are more than 16,100 digital coins listed now, with hundreds of new coins appearing every week. Excellence in cryptocurrency is becoming increasingly challenging. Shiba Inu is currently nothing more than an ERC-20 token built on the Ethereum blockchain. It is subject to the same transaction delays and high fees that the popular Ethereum network constantly suffers from. In other words, other payment currency projects are constantly innovating Shiba Inu and offer a simple reason for merchants to accept SHIB as a form of payment.
This leads to the second reason to avoid Shiba Inu in 2022: the lack of interest in the real world. In a sense, you could say that SHIB services went up last year; But this is to be expected when a few dozen traders willingly accept your currency. The Cryptwerk Online Business Guide shows that only 395 merchants worldwide accept SHIB as a payment method. What’s more, 44 of these 395 traders are nothing more than cryptocurrency exchanges. This means that the 350 most obscure companies online in a world of more than 500 million entrepreneurs accept SHIB as payment. That’s a fraction, and certainly not equal to $20 billion in market capitalization.
History presents the third reason why Shiba Inu is a terrible investment in 2022. Almost all payout coins that gained 24,000% or more in a short time frame lost between 93% and 99% in the 12 to 26 months after their peak. Shiba Inu is already down 60% from its high on Oct 27, and history suggests it has further declines after gaining 49,000,000% in just 12 months.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.