Is Shiba Inu Still A Buy After It Went Up By 1,600,000%?

Shiba Inu is not your average pump and dump meme token

Last Updated October 18th 2021

5 Min Read

Key Points

SHIB has no value outside of sending money from one point to another.
However, the decentralized exchange named after it, Shibaswap, is a different story altogether.

The last 18-months or so have been crazy for crypto. Not only did Bitcoin test prices many thought impossible, but wealth was made from cryptos with very little intrinsic value.

Meme coins ruled 2020 after Dogecoin (DOGE) triggered the meme coin craze. The Dogecoin rally was so phenomenal that anyone who put in just $100 in Doge last year in April is sitting on over $11,800 today.

However, Doge is just half the story. Other meme coins made investors incredible amounts of wealth.

One of the biggest wealth creation stories of 2020/21 involves Shiba Inu (SHIB). Shiba Inu was launched in August 2020, and anyone who bet $100 on it at the time is now worth over $1.6 million.

This meme coin that qualifies as one of the best trades ever was launched by an anonymous person calling themselves Ryoshi. Ryoshi launched this ERC-20 token at the time when the Dogecoin craze was gaining momentum.

It was a case of perfect timing because the token went on to rally by over 580,000%. While it lost a lot of value in the correction that started in May 2021, it has bounced back in recent weeks. Last week, Shiba Inu rallied by 220% in under 48-hours.

This rally saw it break through major resistance levels that it had struggled to push through for months. It also seems to be holding on quite strongly above these resistance levels.

From an investor perspective, it is only natural to wonder, is it still viable to buy Shiba Inu now if one missed its past rallies?

A Case Of Perfect Timing

From a quick glance at Shiba Inu, it is easy to conclude that it is worthless. That’s because there is no real use for the token. It is basically just another token in a sea of other 6000-plus tokens.

The case for its worthlessness can also be made based on how one can easily replicate a similar cryptocurrency. The crypto market has grown so much that it is now possible to launch a token without coding skills.

This has been made possible by apps like cointool.app that helps anyone develop a token and even set up its tokenomics. The process is quite fast too and takes less than 10-minutes.

Although the fundamentals would point to Shib being a worthless token, it has outperformed the market by many multiples. It has maintained its position as one of the world’s most valuable cryptocurrencies for close to a year now.

Shiba Inu’s rise had a lot to do with its name and logo. It came into existence when dog-themed Dogecoin was attracting all the hype, driven by Elon Musk tweets. Its launch timing was pure genius.

Shiba Inu quickly built a community and drew in the hype that saw it test price levels that seem unreal by any metrics. The hype around this token was further amplified by the fact that the founders donated 50% of all Shiba Inu tokens to Vitalik Buterin, the founder of Ethereum, and one of the most famous figures in crypto.

However, Shiba Inu has not been without hiccups. In May, Vitalik Buterin donated $1 billion worth of Shiba Inu towards India’s efforts to fight COVID-19. This created fears that the price could tank as the donated tokens got liquidated. He also burned the remainder of the tokens to a dead wallet, completely distancing himself from the project.

Nonetheless, the perception of Shiba Inu as a worthwhile investment has not changed. While it is still essentially a meme token, it continues to dominate and outperform many of the meme tokens that have come after it.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Enter The Use Case

In most cases, when the price of worthless tokens rally by a fraction of what Shiba Inu did, the developer team dumps and exits. However, the Shiba Inu team did the exact opposite.

They stayed on and have come up with features that have given Shiba Inu intrinsic value. One of the most significant moves they have made towards pushing this project forward is the introduction of Shibaswap. This is a decentralized exchange where one can exchange Shiba Inu and other cryptocurrencies.

The Shibaswap DEX uses three tokens, namely, Shiba Inu (SHIB), Doge Killer (LEASH), and Bone Shibaswap (BONE). Each has a unique role, with BONE being used for governance, LEASH for liquidity in times of low volumes, and SHIB for transactions.

While it only launched recently, this DEX is growing quickly and now has a Total Value Locked (TVL) of over $370 million. To encourage users to try this DEX, the dev team rewards depositors into the exchange with BONE tokens.

This has seen the yields of BONE rally by over 250%. This is due to the slow minting rate of BONE that stands at only 3% of the total 250 million BONE in circulation.

To protect investors from the risk of a hack, Shibswap is regularly audited by Certik, a blockchain security company. It is a guarantee that investor funds are safe.

While all this is exciting, it is important to note that Shibswap is independent of Shiba Inu. As such, an investor who wants to benefit from the growth of this DEX would be better off with LEASH or BONE.

For instance, BONE has a pretty low market cap of just $600 million. This means it has a lot of room for growth. At the same time, one can make money off it by making deposits on the DEX.

As for SHIB, the opportunity for exponential gains may have passed. While Shibaswap is an awesome step forward, it is not big enough to justify a huge valuation for SHIB. Besides, the two are still independent entities.

However, that’s not to say that SHIB is useless. If the Bull Run kicks off again, which seems to be happening now, SHIB could give investors a respectable return on investment. It may not be the mega gains of 2020, but it could easily double or triple in value.