Well, the overwhelming conviction within the crypto community is that Shiba Inu is not a safe investment. Despite reporting an ROI of more than 1,294,881.3% in less than 18 months and climbing from obscurity and becoming the 15th largest cryptocurrency, most investors still question the sustainability of both the token and the Shiba network.
So, should you buy Shiba Inu? Conservative crypto experts have warned investors against buying SHIB tokens, arguing that it doesn't have an intrinsic value and that the social media buzz driving its growth will fade soon. The rest feel it is still okay to invest in Shiba Inu, but only for active traders and short-term HODLers. Both parties nevertheless agree that there are numerous risks facing Shiba Inu and the rest of the meme currencies. They also agree that such risks have made the assets lose their appeal to long-term crypto investors.
But what are some of these risks, and how can you avoid them? We answer this by looking at risks associated with Shiba Inu investments and practical steps that you can take to keep your Shiba Inu safe.
First, though, here is everything you need to know about buying SHIB tokens.
What You Need To Consider Before Buying Shiba Inu (SHIB)?
Before buying Shiba Inu, consider the fact that it is one of the most volatile crypto assets around today. Its prices are constantly rising and falling, often at drastic rates, which poses major threats to your investments. In the last 30 days, for instance, Shiba Inu prices have been ranging between $0.00001744 and $0.00003623. You should, therefore, avoid buying or trading Shiba Inu if you are looking for a safe investment.
You also need to learn how to sneak Shiba Inu into your investment portfolio, considering the fact that it does not offer a minimum return guarantee. Most investors will tell you to dedicate between 5% and 30% of your entire investment portfolio to Shiba Inu and other crypto investments. 5% or lower for the risk-averse traders and 30% or more for the risk-tolerant and highly experienced crypto investors.
What Are The Risks Associated With Shiba Inu (SHIB)?
The most prevalent risk to Shiba Inu investing is its untamed volatility, but the most lethal yet has to be the threat of losing the investment to hackers and other cybercriminals.
Price volatility is more prevalent because Shiba Inu token prices are constantly changing. It, for instance, isn't surprising for the altcoin to lose more than 10% of its value (technically crash) within a day. And this is often attributed to a myriad of factors like a reaction to one of Elon Musk’s tweets, Bitcoin price action, or crypto market news.
This loss is, however, almost always impermanent because it often corrects and covers the loss with a future rally. Between 2nd and 8th September 2021, for instance, Shiba Inu prices fell by close to 30%. However, when Elon Musk tweeted about his new pet Shiba Inu dog, the token rallied by more than 133%, placing every SHIB investor out of the red.
Losses to hackers are, however, permanent, and there is little to nothing that you can do to recover your stolen SHIB tokens. You have to be especially careful when investing in cryptocurrencies and take the security of your coins seriously because cases of crypto hacking are on the rise. In August, for example, Japan-based Liquid Exchange was hacked and more than $90 million worth of cryptocurrencies stolen. In the United States, at the moment, Coinbase wallet users are up in arms after hackers allegedly drained their accounts.
Other scams to look out for
Rugpull scams within the DeFi ecosystem are on the rise, and this has raised legitimate fears about Shiba Inu’s Shibaswap decentralised exchange and its promise of 66%+ interest on staked funds. In a classic rug-pull scam, as was executed by Cryptoqueen Ruja Ignatova with the One Coin scam in 2019, developers trick people into investing in a cryptocurrency or a crypto project like a DeFi app with the promise of above-market average returns, only to abandon this investment scheme halfway and run away with investor funds.
Crypto security experts are, therefore, concerned that though the ShibaSwap is hosted on the ultra-secure Ethereum blockchain, its code is still unaudited. By not subjecting it to audit and sharing such a report with the public, experts are concerned that ShibaSwap’s code could be housing loopholes that could allow either the developers or malicious hackers to steal investor funds.
Pump and Dump
There is also the threat that investors and influencers could use either money or misinformation to instigate a Shiba Inu pump and dump scheme. Experts are worried that given the influence that social media has on SHIB token prices, influential social media users and crypto celebrities may use these platforms to spread misinformation about Shiba Inu with the aim of creating a temporal price rally. They would have bought as many SHIB tokens as possible at relatively low prices and later dumped them to unsuspecting investors at the peak of the falsely instigated rally.
How To Keep Your Shiba Inu (SHIB) Safe
You could shield your Shiba Inu investment from hackers by getting a reliable hardware wallet that stores the private coins for these tokens offline, especially if you are a short-to-medium term crypto investor. Active traders, on the other hand, need to activate all the security features provided by the crypto wallet or exchange service providers, especially multi-factor authentication.
To escape scammers and avoid being trapped in pump and dump schemes, learn to carry out your own research before staking your funds in a DeFi project or jumping onto a rally. Find the factors influencing the price rally and assess their sustainability first.
Even more importantly, only invest what you can afford and are willing to lose.
Shiba Inu (SHIB) Security Vs Privacy
Even as you search for more ways to keep your Shiba Inu and other cryptocurrencies safe, you first need to understand that there is a world of difference between security and privacy.
Throughout this post, we have been addressing crypto security, which involves studying the different risks your digital investment is exposed to. It also stretches to cover research on how to either eliminate these risks or limit their impact when they hit.
Cryptocurrency privacy, on the other hand, involves assessing how your personal data is handled by the different entities you interact with when buying and selling Shiba Inu tokens. It starts with assessing the level of anonymity provided by the Shiba Inu network and vetting crypto exchanges and wallets to identify the parties with access to your personal data, the amount of personal information they have collected, measures they have taken to protect it from authorised access, and checking how/if it is shared with third parties.
The primary difference with security and privacy is that you have more control over how Shiba Inu tokens are stored than how exchanges and wallet service providers store, access, and share your personal data.
Bottom Line: Is Shiba Inu (SHIB) A Safe Investment?
Shiba Inu is not a safe investment, but it has proved to be a great product for speculative traders, seeing that it can easily grow its value by more than 100% in less than a week. Given the limited real-world use cases for both the token and its network, as well as the lack of a clear roadmap for both the coin and its network, experts advise you not to approach Shiba Inu with a long-term investment mentality.
If you want to invest in Shiba Inu, consider getting a reputable hardware wallet and activating all the security features provided by both the exchange and wallet. Additionally, vet DeFi apps thoroughly before trusting them with your digital assets and only invest or stake what you can afford to lose.
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