Cryptocurrency Showdown: Shiba Inu Outshines Bitcoin Amid Market Rebound

In 2021, the combined market capitalization of all cryptocurrencies reached a zenith of $2.9 trillion, only to plummet by 72% in 2022 to a mere $826 billion due to several high-profile failures within the industry. However, sentiment has since improved as regulators cracked down on bad actors, and the approval of exchange-traded funds (ETFs) for Bitcoin added a layer of legitimacy to the crypto market. As a result, Bitcoin surged 44% in the first half of 2024, attracting significant attention as it approached a new record high. Surprisingly, an unlikely meme token, Shiba Inu, outperformed Bitcoin during the same period.

Shiba Inu soared an impressive 61% in the first half of the year. Unlike Bitcoin, Shiba Inu’s gains were not bolstered by ETF approvals or any specific catalyst. Instead, the same speculative fervor that propelled Shiba Inu to a mind-boggling return of 45,278,000% in 2021 seems to be gathering momentum once again. Back then, a modest investment of $3 could have transformed into $1 million. However, that euphoric run ended in a dramatic collapse, with the token plunging 92% from peak to trough. Despite its strong performance this year, the token still trades 80% below its record high.

The question remains: is mere speculation enough to send Shiba Inu on another historic run? Could it possibly surge all the way to $1 per token from its current price of $0.000016?

One significant obstacle to Shiba Inu’s rise is its lack of utility. The token has limited use outside the cryptocurrency world, with only 949 merchants accepting it as a form of payment according to Cryptwerk. Without a compelling reason for consumers to spend their Shiba Inu tokens, ownership is largely driven by the hope that someone will eventually pay a higher price, a classic case of speculation.

Developers are attempting to enhance Shiba Inu to foster wider adoption. Last year, they launched Shibarium, a Layer-2 blockchain solution that addresses inefficiencies in the Ethereum network, where Shiba Inu was originally built. This upgrade enables faster and cheaper transactions using Shiba Inu tokens. A Layer-3 upgrade is also in development, aiming to improve aspects like privacy. Additionally, developers have been working on a metaverse since 2022, where Shiba Inu tokens can be used to personalize digital plots of land. Unfortunately, progress appears to have stalled with no firm release date for this virtual world. Developers also created a digital card game called Shiba Eternity, designed to promote the Shiba Inu ecosystem. However, none of these initiatives are likely to drive the mainstream adoption Shiba Inu needs to reduce its volatility and sustain value over the long term.

The path to $1 per token is hindered by a significant mathematical challenge. There are currently 589.26 trillion Shiba Inu tokens in circulation. For the token to reach $1, its market capitalization would need to skyrocket to $589.26 trillion, making it 165 times more valuable than Apple, the world’s largest company, and more than five times the value of the entire global economy, which generated $105 trillion in gross domestic product last year.

In essence, it is highly improbable for Shiba Inu to reach $1. Investors interested in the cryptocurrency space might find it more prudent to consider Bitcoin, especially given the new ease of buying it through ETFs.