Cryptos have been on a roller-coaster ride in 2021–2022, but when we talk about Shiba Inu, it has definitely benefited from this difficult situation.

Despite having a low current value, the Shiba Inu Coin has gained an ample amount of attention for various reasons. However, the coin dominates a major portion of the Crypto market and is proving to be a great option for investors. But what is Shiba Inu? Should you consider purchasing it? What are the possible pros and cons of the SHIB investment this 2023? Let’s find out in this article.

Origin of Shiba Inu

Ryoshi, a creator who prefers to remain unidentified, invented the Shiba Inu coin in August 2020. We are uncertain about the genuine identity of the creator, just like with Bitcoin and Satoshi Nakamoto. Ryoshi might not only be a single person but rather a group of persons for all we know.

• It is an altcoin to Dogecoin, which is again an altcoin to Bitcoin.
• It was given the Shiba Inu breed of Japanese dog as its name.
• Through its following crowds, memes, persistence, and cute puppy, it is already incredibly popular among major Crypto exchanges.

More about Shiba Inu

Shiba Inu was founded in August 2020 by Ryoshi and named after the adorable dog breed of the same name. It is important to note that Shiba Inu is not the same as Dogecoin, which also uses a canine theme with the same breed as its mascot. Shiba Inu positions itself as a “Dogecoin killer.”

Similar to other Cryptos, Shiba Inu operates on a decentralized network that utilizes blockchain technology to manage and track transactions. The blockchain serves as a continuously updated record of every transaction involving the Crypto. Shiba Inu, specifically, runs on the Ethereum blockchain, providing the safety and functionality of the platform.

Other aspects of Shiba Inu

Shiba Inu is divided into a number of tokens that support the operation of the entire Crypto ecosystem:

• SHIB – The basic Shiba Inu currency can be traded and utilized as a medium of exchange.
• LEASH – The LEASH token is the most limited of the Shiba Inu-related coins, with a maximum supply of 107,646 units. It offers staking rewards to people who verify Crypto transactions.
• BONE – Shiba Inu users can cast their votes for multiple proposals using the 250 million unit BONE token.

Shiba Inu also features other aspects of a community, such as Shiboshis, a kind of non-fungible token (NFT), and ShibaSwap, its own decentralized platform for trading coins.

The Crypto’s ecosystem continues to spoof its dog-themed coin, including its white paper, which its creators refer to as a “WoofPaper.” Meanwhile, it refers to the coin’s supporters as its “Shib Army.”

Should you consider Shiba Inu as a worthy investment?

Despite its brief existence, Shiba Inu has experienced significant price fluctuations, rising rapidly before plummeting just as quickly. Understanding the underlying factors determining its value is crucial rather than solely focusing on price gains to avoid missing out on investment opportunities.

Traditional investments like stocks are typically backed by underlying assets or cash flow, setting them apart from Cryptos like Shiba Inu. When investing in a stock, investors are betting on the success of the underlying business, leading to long-term returns. In contrast, Crypto investments are not supported by any asset or cash flow, and their value is determined by speculative demand.

Speculative demand and optimism drive the value of Cryptos like Shiba Inu. Investors can only make a profit if they can sell their coins to someone else willing to pay a higher price. This speculative nature of Crypto investments keeps legendary investors like Warren Buffett away from them.

Shiba Inu’s low price makes it attractive to some traders as a type of Crypto lottery ticket, similar to penny stocks. These traders believe that if the coin’s value increases even slightly, they could make a significant profit. However, the odds of such an occurrence are low.

While it is possible that Shiba Inu’s value may continue to rise in the future, the likelihood of this happening is small, given the speculative nature of Crypto investments and the lack of underlying assets or cash flow supporting it.

Now, let’s check out some pros and cons of SHIB investment in 2023.

Pros of SHIB investment in 2023

• Launch of Shibarium: Shiba Inu has announced the upcoming launch of its own layer-2 blockchain network, known as Shibarium, which is expected to be introduced this year. While Dogecoin is not built on the Ethereum mainnet, Shiba Inu’s ERC-20 token is. The Shibarium will provide Shiba Inu with its own blockchain infrastructure, enabling autonomous developers and users to build on and engage in its validation process. Users and stakers who take part will be compensated in the BONE token. The SHIB token and all Shiba Inu-related NFTs will be migrated to Shibarium once it is launched.

• Launch of own Metaverse: Shiba Inu is planning to release its own metaverse, known as SHIB: The Metaverse. Over 100,000 virtual land plots have been made available, with many being bought before the launch. Shiba Inu’s chief developer, who goes by the pseudonym Shytoshi Kusama, has revealed that the metaverse will be developed in collaboration with a leading AAA game studio.

• Shiba Collectible Card Game: Shiba Inu is developing a play-to-earn game, and gaming veteran William Volk, who has worked with Activision and ROKiT Games, has been appointed as one of the leads for the project. The game will follow the concept of other collectible card games, like Pokémon and Magic: The Gathering. Additionally, it has been revealed that the Australian studio PlaySide will be assisting in the game’s creation. The TREAT token will be awarded to players as compensation for participating in the game.

• Rolling out Shi: Shiba Inu is preparing to introduce the Shi stablecoin, which will be utilized on the Shibarium layer-2 blockchain. The purpose of the Shi stablecoin is to bring added value and uses to Shiba Inu, and it will be pegged at $1.

• Big roles of the Whales: In July 2022, it was discovered that Shiba Inu had an advantage in the form of whales, as it was the second-largest holding among Ethereum whales, behind only USDC. Approximately 13.9% of the top 100 Ethereum whale wallets held SHIB, while 18% held USDC. These whales play a crucial role in predicting bullish price momentum, as their presence signals confidence among experienced investors that the asset will increase in value.

• Potential to be the top meme coin: Shiba Inu has emerged as a major competitor to Dogecoin, positioning itself as a potential top meme coin in the Crypto market. In the previous bull run, Shiba Inu briefly surpassed Dogecoin in market capitalization and became one of the top 10 meme coins by market capitalization. This competition between the two coins is significant because it impacts Shiba Inu’s potential for growth. Investors are now aware of the potential gains that meme coins can offer, and the best-performing meme coins are likely to attract the most investment. Therefore, if Shiba Inu continues to outpace Dogecoin, it could see a significant increase in investments ahead of the next bull run.

• The element of founder anonymity: The anonymous nature of Shiba Inu’s founder(s) has been a contributing factor to its success, similar to how Bitcoin’s founder(s) anonymity helped dissociate the Crypto from any individual. This means that any potential issues or controversies surrounding the founders of Shiba Inu may not directly impact the Crypto’s price movement. This element of anonymity has been appealing to investors, especially considering the recent collapses of projects due to founder issues in the Crypto space. As a result, this may continue to drive interest and investment in Shiba Inu moving forward.

Cons of SHIB investment in 2023

• Mystery: The decentralized nature of Shiba Inu is further compounded by the fact that its lead developer, Shytoshi Kusama, uses a pseudonym, and news about the project is only disseminated through occasional posts on Medium. Kusama has cited non-disclosure agreements as the reason for not sharing details about SHIB: The Metaverse. Similarly, information about the Shiba Inu collectible card game and Shibarium is also limited and veiled in secrecy. The absence of a centralized platform to track developments and announcements means that the project’s followers must rely on information from an anonymous source.

• Unconfirmed tokenomics: The lack of clarity around tokenomics can raise concerns about the credibility of a Crypto project. In the case of Shiba Inu, the BONE token’s limited supply and distribution for staking and rewards on ShibaSwap may raise questions about how it will be used for governance and gas fees on the upcoming Shibarium layer-2 blockchain. Without a clear explanation of how BONE will be utilized, investors may become skeptical of the project’s tokenomics and its long-term sustainability.

• Competition: Shiba Inu faces stiff competition in the metaverse, layer-2 blockchain, and play-to-earn gaming space. It will be competing against established players like Polygon, Decentraland, The Sandbox, Axie Infinity, and STEPN. While Shiba Inu has a dedicated following, it remains to be seen how it will fare against these leading Cryptos with established decentralized bases and more transparent development teams.

• Stablecoin dramas. The lack of information on the backing of the Shi stablecoin raises concerns. The only available information indicates that TREAT will help to maintain the stablecoin’s value at $1. This news is not encouraging, especially after the collapse of TerraUSD in May. Other algorithmic stablecoins responded to Terra’s collapse by quickly backing up their $1 peg with real US Dollars or other Crypto reserves.

• Lacks differentiating features: Shiba Inu faces a major challenge in terms of lacking unique features that differentiate it from the vast number of other Cryptos in the market. This has resulted in limited adoption, particularly among companies that could increase SHIB’s popularity beyond the Crypto community. At present, fewer than 100 organizations utilize SHIB as a means of payment. This could hinder Shiba Inu’s value growth, especially when competing against highly practical Cryptos like Bitcoin and Ethereum.

• The opportunity for exponential gains may be gone: Shiba Inu gained significant attention during the 2020/21 bull rally, surging by an astounding 48,000,000%. While this brought Crypto into the spotlight, it also complicates its current investment potential. Many investors who bought during this period are still holding positions that yield substantial profits, despite the current market downturn. As such, they may have little incentive to hold on to their Shiba Inu investments and could choose to sell, causing further price declines.

Consequently, even at current prices, Shiba Inu’s value may continue to decline if large investors opt to exit their positions and invest in newer Cryptos or other assets. This underscores the importance of diversifying one’s portfolio with other high-potential Cryptos when investing in Shiba Inu.

• Shiba Inu is an ERC-20 token: Shiba Inu operates on the Ethereum blockchain and is an ERC-20 token, which comes with its advantages as Ethereum is a dominant platform. However, there are various potential risks associated with this, such as the fact that when Ethereum experiences a drop in value, ERC-20 tokens are likely to follow suit. Therefore, it is important for investors to monitor the overall health of the Ethereum ecosystem as they invest in Shiba Inu.

Bottom line

Shiba Inu (SHIB) can be considered a good investment, but before considering investing in this project, we recommend you do your own research. There’s no doubt that SHIB has proven itself to be a worthy investment. Still, considering the volatility of the Crypto market, you should take advice from investors and experts or prepare yourself to take the investment risk.

Frequently Asked Questions

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.