Is Shiba Inu Safe To Invest In?

Should You Invest in Shiba Inu Coin?

Last Updated January 28th 2022

13 Min Read

It may come as a surprise to you that the keyword cryptocurrency brought 3.5 billion results to Google in 0.65 seconds. What’s more surprising is that the keyword investing in cryptocurrency 2022 produced about 392 million results in 0.53 seconds. The most interesting part is the keyword investing in Shiba Inu resulted in 10 million hits in 0.60 seconds. What this means is that there are millions of people who are interested in investing in Shiba Inu coin and cryptocurrencies as a whole.

Millions of people can be categorized into two groups. The first group is legitimate investors who are interested in building awesome portfolios with well-researched digital assets that have potential in the market. The second group comprises cybercriminals who have seen the huge liquidity being poured into digital tokens and as a result, create websites and fake cryptocurrencies to lure novice traders and investors into sending them their hard-earned money.

As per the findings of Crypto Head (a cryptocurrency news outlet) that uses data from the Federal Trade Commission, crimes related to cryptocurrencies have on average soared 312% annually since 2016.

The crimes vary in nature but the most consistent ones come from hackers breaking into digital wallets and stealing the crypto holdings of people experimenting with crypto investing. Hackers stole $600 million in one of the major cryptocurrency heists in the form of Binance Coins (BNB), United States Dollar Coins (USDC) tokens, and others in August 2021.

The other cryptocurrency crime is related to the fear of missing out (FOMO) on a potential millionaire-maker coin that sees many unsophisticated traders and investors scammed out of 100s, 1000s, and even millions of pounds, as reported by BBC News in May 2021.

According to Europol's 2020 Internet Organized Crime Threat Assessment Report published in October 2020, Bitcoin continues to remain as the most popular coin used in dark web activities. Alternate coins (altcoins) that were cited in the report included privacy coins Monero (XMR), ZCash (ZEC), and Dash (DASH).

On 27th August 2021, it was reported that Dogecoin has been involved in a scam that saw investors lose more than $100 million in Turkey.

Since the creation of Shiba Inu was inspired by the first mover of meme-inspired crypto tokens (Dogecoin), many questions have started flooding online search engines about the authenticity of the whole Shiba Inu project. Some of the questions are, is investing in Shiba Inu safe, or is Shiba Inu safe to invest in?

Here is what you need to know about Shiba Inu as a transactional currency as well as a tradable token. The information provided will guide you in keeping your Shiba Inu Coins secure in case you decide to invest in them.

What to Consider Before Buying Shiba Inu?

Shiba Inu is a very volatile investment. If you're looking for a safe investment with high returns, then don't invest in Shiba, or any crypto assets for that matter.

Shiba isn’t the only volatile cryptocurrency, and other, newer coins may be even riskier.

Before buying Shiba Inu, you must consider volatility. Cryptocurrency falls under the category of a highly volatile asset class. What this means in simple terms is that it is highly unpredictable and poses a great risk to your capital.

Such volatility is the primary reason why the Chief Executive Officer (CEO) of Horizons Exchange Traded Funds (ETF) Steve Hawkins pointed out in May 2021 that, “Bitcoin is more volatile than volatility itself.” Since altcoins follow parent crypto BTC in bullish days and bearish seasons, they also take after the digital gold when volatility comes to the discussion table.

If you are looking for a safe investment that will guarantee you annual percentage yields (APYs), then you shouldn’t invest in Shiba Inu Coin or any other digital assets. You should instead opt for government bills and bonds that promise between 2% to 5% returns per annum.

To give you an extensive understanding of the unpredictable nature of Shiba Inu (SHIB), let’s consider a summary of its price-performance from 1st January 2021 to date.

From Shiba inception as a tradable token (SHIB) in August 2020 up to 30th January 2021, SHIB was priced at $0. It closed at $0.00000003 on the last day of January and recorded a day trading volume of $23.9 million to close the month.

In the space of 4 months, Shiba Inu rose from having an insignificant market capitalization to reaching a high of $0.0000388 on 10th May 2021. On that day, SHIB saw huge investor interest with $19.5 billion as trading volume which corresponded to a market capitalization of $13.8 billion. In 5 months, Shiba Inu Coin jumped from being an unranked digital asset to a large-cap digital asset since its valuation was more than $10 billion.

At the end of May, SHIB was trading for $0.000007 which is more than 80% drop from the high it reached in May. The relevance of this can be attributed to investors who bought Shiba Inu at its highest price. A $1,000 investment has now dropped to $200.

This is the primary reason why experts recommend that traders and investors should keep their cryptocurrency investments to less than 5% of their total budget. What’s more, you should not rely on your crypto holdings as a sure way to making enormous gains. Instead, have a conventional retirement plan. You can also spread your investments across volatile and less-volatile assets so that a loss in one asset class can make up for the other.

Editor's Take: Due to the unpredictable nature of cryptocurrencies, if you do not want to minimize risk but rather maximize profit, kindly invest an amount of money that you can afford to lose.

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

What Are The Risks Associated With Shiba Inu?

The biggest risk associated with investing in Shiba Inu and other cryptocurrencies is hacking and fraud. According to data retrieved from the Federal Trade Commission, about 7,000 reports of cryptocurrency investment scams have been received by the agency since October 2020.

Aside from this, cryptocurrency scams have increased 1,000% since the same period. In addition to this, cryptocurrency scams saw Americans lose more than $80 million between October 2019 and October 2020.

Moreover, on 17th May 2021, the Commission warned that scammers impersonating self-proclaimed DOGEFATHER and Tesla business mogul, Elon Musk, have made off with more than $2 million. They cautioned investors to be extremely careful when it comes to organizations they send their monies to.

Based on the experiences of the experts at Trading Education, crypto crimes normally involve cybercriminals sending unsolicited offers via social media platforms (Twitter, Reddit, and Facebook) and emails with a promise of helping you increase your holdings so that you can earn consistent passive income. More often than not, scammers ask that an investor send an amount of money to a particular digital wallet. Once the transaction is completed, the scammers disappear into the wind, never to be heard of again.

In most reported cases surrounding crypto, crimes come about when cybercriminals request payments for certain online activities to be paid in cryptocurrency.

Editor’s Note; You should do away with unsolicited offers related to the crypto space. It does not matter the type of financial information that will be offered by a particular expert. One vital thing you should know is that price forecasts are based on possibilities and not certainties. Kindly conduct independent research (fundamental and technical analysis). After you are done with the research, find a regulated cryptocurrency exchange that meets your preference and buy your Shiba Inu Coins. The cryptocurrency market is highly unpredictable so do not trust anyone who promises to help you make unbelievable gains overnight.

Other Types Of Scams To Look Out For

Initial Coin Offerings (ICOs) for Fake Cryptocurrencies

Initial Coin Offerings are a fundraising method that is employed by startups to offer services and products, usually related to the decentralized finance market. Normally abbreviated as ICOs, this is an unregulated way by which new cryptocurrency ventures are raising funds.

ICOs have become extremely popular. This has become the preferred method used by young entrepreneurs to raise billions of dollars so that they can add their innovations to the current crypto revolution.

To give you a fair idea of the importance of ICO in the digital financial markets, nearly $13 billion was raised through this process in 3 years (January 2016 to August 2019) as per data retrieved from The Review of Financial Studies.

Although ICOs were meant to support great minds without the needed financial base, cybercriminals have entered this space due to its unregulated nature. Several financial technology (FINTECH) companies are popping up with the creation of fake corporate teams, fake social media accounts to give them an online presence, and a fake digital wallet to put more weight behind the credibility of their shadow organizations. Normally, such fake wallets are used to accumulate money from victims.

Do not leave the research of crypto projects in the hands of a significant few (so-called experts) in the money markets. Several financial news outlets continue to tell people to read whitepapers of projects but scammers have found a solution to that as well. Most shady crypto projects are plagiarizing whitepapers of successful companies that had great ICOs. Therefore, reading whitepapers alone is not enough.

You must follow the trading history of a project’s native asset or token, in this article, Shiba Inu Coin (SHIB), for the Shiba Inu crypto project. Monitor the trading volume section of the cryptocurrency’s performance history.

At the time of writing this feature article, SHIB had a trading volume of $18 billion in 24 hours. This means that the cryptocurrency continues to see huge liquidity which signals to long-term investors that the token and its project are not about to disappear into thin air as others have done.

For most experienced traders and investors, this is the way to personally assess a cryptocurrency’s progress in such a saturated market, who knows, this could work for you too.

Crypto Pump and Dump Schemes

Pump and Dump Schemes have existed since the inception of stock trading. Pump-and-Dump is an illegal scheme that is mostly employed by cybercriminals to boost the price of a cryptocurrency through exaggerated statements, false, or misleading information.

Currently, the cryptocurrency market continues to face mild forms of pump-and-dump. This is highly evident in social media feeds where certain people post comments such as I have purchased SHIB, ADA, DOGE, or BTC and is going to the moon.

When novice investors post questions on online groups and forum boards, some so-called experts quickly reply with messages such as, Buy BTC because it's heading for $100,000 at the end of the year, buy SHIB and HODL for the long term, invest in this or that cryptocurrency because I have a huge stake in that asset.

Once someone posts comments without giving supporting materials (fundamental or technical), you should know that they may be ill-equipped to know the real future valuation of that particular asset they are recommending. What you may not know is that they may be waiting for people to buy more of the recommended coin so that they can lock in their gains.

Find ample time to get to know the pros and cons of investing in Shiba Inu Coin as well as any potential upgrades to its issuing authority (protocol) so that you can act on the cryptocurrency.

How To Keep Your Shiba Inu Coins Safe

Having a safe place to store your Shiba Inu Coins is one of the things you should prioritize before investing in SHIB. This is because there are numerous cases of hackers breaking into entire cryptocurrency exchanges to steal their holdings.

On 11th August 2021, it was reported that blockchain site Poly Network has lost $600 million to hackers. The hackers exploited a vulnerability in its system. This saw 1000s of Ether (ETH) tokens worth millions of dollars stolen.

On 19th August 2021, it was reported that the Japanese Cryptocurrency Exchange, Liquid, had more than $90 million worth of cryptocurrency stolen. The hackers compromised some of the digital currency wallets (warm wallets) on the exchange. The resultant effect was a suspension of deposits and withdrawals.

This meant that holders who wanted to retrieve their money when the news started making waves could not do so. For those whose holdings were susceptible to unfavourable market news, their gains could have been wiped off by the time withdrawals were restored by the exchange.

This is the primary reason why you have to research cryptocurrency exchanges that are well-established and have the essential features to keep your Shiba Inu Coins safe.

Exchanges such as eToro, Binance, OKEX, FTX, Coinbase, Gate io, and Huobi Global among others are well regulated and have the necessary security encryptions that safeguard and protect your private keys. Some exchanges are even insured by the Federal Deposit Insurance Corporation (FDIC). This means that if something should go wrong, the exchange will indemnify you as a customer.

Do not fall victim to exchanges that promise huge bonuses on deposits without the needed reputation. Invest in Shiba Inu through one of the aforementioned exchanges. This will help you have peace of mind to go about your day-to-day activities without worrying about what could happen to your crypto investments.

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

Shiba Inu Security Versus Privacy

Financial Technology (FINTECH) companies offer a diverse range of products that can help you secure your crypto holdings from the prying eyes of hackers. With that said, you should know that there is a major difference between security and privacy.

You must also understand that there is a difference between Shiba Inu Protocol and Shiba Inu Coin (SHIB).

Shiba Inu Protocol is the digital payment network that facilitates financial transactions involving SHIB as a transactional cryptocurrency.

Shiba Inu Coins (SHIBs) that are stored on exchanges are not on the Shiba Inu Protocol. This is because the total supply of SHIB is circulated onto the various cryptocurrency exchanges that decide to list the token. What this means is that privacy can be prioritized in terms of transactions on the Shiba Inu Protocol while security can be prioritized in terms of holdings on cryptocurrency exchanges that list Shiba Inu Coin (SHIB) for trading.

This is the primary reason why the author of Cryptocurrency Investing for Dummies, Kiana Danial pointed out that, “Security and privacy are two separate topics.”

While you can maintain privacy in sending SHIB to a friend over the internet globally due to the decentralized nature of the Ethereum Network that houses the Shiba Inu Protocol, you cannot maintain privacy when it comes to the number of trades, investments, and crypto holdings you have. This is because in complying with regulations, such data could be made available to the appropriate authorities in case you are associated with a specific cybercrime by your preferred exchange.

On the other hand, the security of your Shiba Inu holdings lies in the hands of two entities (Ethereum as the housing entity of the protocol and your preferred exchange as the housing entity of your Shiba Inu coins). Once hackers are able to breach either of these, the price of SHIBA will go down since traders or investors normally react bearishly (negatively) to such incidents.

Editor's Note: If you want total privacy when you engage in peer-to-peer cryptocurrency transactions, you do not need Shiba Inu. There are cryptocurrency projects that are designed solely for this and they are called privacy coins (Monero, Dash, and ZCash). You can use their protocols but do a thorough assessment of its native tokens XMR, DASH, and ZEC before acting on them investment-wise.

The Bottomline - So, Is Shiba Inu Safe To Invest In?

YES! As per extensive research conducted on the reputability of the Ethereum Network that houses the Shiba Inu project as well as forecasts made by experts on the token, it is safe to invest in Shiba Inu (SHIB). The Ethereum Network is protected by the proof-of-work (POW) algorithm that makes it difficult for breaches by hackers.

Buying, holding and selling on well-regulated cryptocurrency exchanges also protect your Shiba holdings.