That was several days before SHIB started trading on Coinbase. Since then, it’s up 33% as I write this to the astronomical price of 0.00000928 cents. But, hey, 32% is 32%, especially when you consider that its annualized return is something like 832% at its current pace.
Should it lose one of its five zeros over the next few months, there will be a massive party.
Given Shiba Inu is considered the next Dogecoin (CCC:DOGE-USD), or perhaps even the better version of DOGE, it reminds me of my April 1 article about DOGE. Here’s why.
Using Shiba Inu Instead of Dogecoin to Buy a Snazzy Jersey
In my April article, I used the example of Wooter Apparel, a company that specializes in customized team jerseys. It had started accepting DOGE for online payment by its customers.
I lamented that if I had bought $50 of DOGE at the end of 2020, I would have been able to pay for an order of 10 jerseys with that small sum in just three months.
Dogecoin was trading at 0.004741 cents at the end of December. By March 31, it was at 0.053555, 1,030% higher. In May, DOGE had gone into the stratosphere, trading as high as 74 cents. As I write this, it’s at 0.202870 cents, 4,170% higher.
If I bought $50 of DOGE at the end of 2020 with greenbacks and then paid for my 10 jerseys with greenbacks instead of DOGE, today, I would have 10 jerseys and $1,540 [$2,140 less $600 for jerseys]. The other way, I’d have 10 jerseys and nothing else to show for my Dogecoin investment.
With Shiba Inu I’d have 10 jerseys and millions in greenbacks. But, of course, that transaction never would have happened because, as far as I know, Wooter doesn’t accept SHIB tokens for payment.
It’s kind of like dreaming about how you’re going to spend that big lottery win. It’s harmless if you understand that life doesn’t work this way.
Where’s the Beef?
My immersion in all things cryptocurrencies comes down to one thing: Utility. I will not blindly follow any cryptocurrency that doesn’t have utility built into its DNA.
So, what’s Shiba Inu’s utility? Nothing, as far as I can tell from anything I’ve seen on the internet or read from InvestorPlace commentators. However, that doesn’t mean you shouldn’t speculate on SHIB.
“Rather than simply dismissing the hype outright, it’s important to realize that what we’re seeing is the mass movement of traders new to crypto moving into the space,” Fortune reported Ben Caselin, head of research and strategy at cryptocurrency exchange AAX, saying about the cryptocurrency in May.
There’s no question cryptocurrencies of all sizes are gaining followers. To suggest otherwise would be pigheadedly wrong. As Fortune pointed out in May, SHIB had daily trading volumes of over $8 billion.
That said, it’s unlikely that Shiba Inu, the 47th largest cryptocurrency by market capitalization, will pass Dogecoin, the 10th largest with a market cap 12x as large, anytime soon.
“I’d be surprised if SHIB overtook DOGE,” Sam Bankman-Fried, chief executive officer at cryptocurrency derivatives exchange FTX, told Fortune. “But anything can happen!”
Indeed it can.
The Bottom Line
As I said at the top, it’s hard to take Shiba Inu seriously when it trades at o.000007 cents or 0.00000928 cents or even 0.00005 cents.
“But like penny stocks trading under $5, if I have $50,000 to invest, why would I consider Ideanomics (NASDAQ:IDEX) at $2.40 when I can own Nvidia (NASDAQ:NVDA) at $228? I wouldn’t,” I wrote on Sep. 10.
“If Shiba Inu was to trade at a penny, then perhaps, I might take it more seriously. As it stands, there are too many other players ahead of it in the top 10 alone, including DOGE in the eighth spot by market cap. But it at least has some utility while trading around 29 cents.”
Let’s face it. Buying SHIB-USD is akin to buying a lottery ticket. If you can be honest about this fact, I don’t see what’s wrong with using some fun money to bet on it. However, if you feel it’s an actual investment. I’m here to tell you it’s. not.
InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.