Up 130% Already This Year, Can Shiba Inu’s Price Go Even Higher?

One of the hottest cryptocurrencies this year is Shiba Inu (SHIB -1.74%). Up 130% year-to-date, memecoins appear to be alive and well among retail investors. But with such impressive gains already in 2024, is it too late to buy digital currencies? Or is this coin just getting started, and increased interest in the broader crypto market could lead to further momentum for Shiba Inu?

In recent years, the number of companies accepting Shiba Inu dogs has increased significantly.

One of the reasons why the Shiba Inu has become famous among crypto investors is simply because of the increased acceptance of cryptocurrencies. Meme or not, more places are accepting it, which is a positive development for Shiba Inu owners, as it could lead to increased demand for the coin.

According to data from Cryptwerk, there are 935 merchants in the online cryptocurrency directory’s database that accept Shiba Inu as a payment method. This is a 16% increase over the 806 merchants who accepted it a year ago and a 46% increase compared to two years ago.

There are over 9,400 participating stores Bitcoin (BTC 0.30%), the website suggests that Shiba Inu still has a long way to go before it becomes as popular as the top cryptocurrencies. But it’s definitely moving in the right direction.

Shiba Inu instability is inevitable.

Almost 92% of crypto wallets storing Shiba Inu hold less than $1,000 of meme coins. For Bitcoin, the percentage is slightly lower at 84%. This suggests that Shiba Inu is more biased towards small investors than Bitcoin. However, meme coin price fluctuations may actually be due to large investors.

According to CoinMarketCap, Shiba Inu’s whale concentration is as high as 63%. Whales are wallet addresses that hold more than 1% of a coin’s circulating supply. And the higher the percentage, the higher the potential volatility as a small number of whales can have a large impact on the coin’s price. For Bitcoin, the whale concentration is only 1.5%.

However, there has not been much change recently. In early March, Shiba Inu’s trading volume was high, often exceeding $2 billion in total, and the coin was on the rise. Recently, the coin’s momentum has slowed and is on the decline, but at the same time the trading volume is also decreasing (less than $1 billion per day). This could be further evidence that whales have a large influence on coins. And the danger for investors is that price changes can occur suddenly and without much warning.

Should I buy a Shiba Inu?

Shiba Inu’s valuation could skyrocket in either direction in an instant, which is both the risk and the interesting thing about meme stocks. Its fluctuations are sometimes unpredictable. So despite the impressive rise, it’s certainly possible that Shiba Inu’s valuation will rise further this year.

The danger for crypto investors is that there is no fundamental reason to expect the value of cryptocurrencies to rise. The main theory of investing is based on the Great Fool Theory and the expectation that someone will buy at a higher price. But this is purely speculation. If you are bullish on cryptocurrencies, you may be better off simply investing in Bitcoin or buying stocks with exposure to cryptocurrencies. Shiba Inu are a very risky investment and a real gamble given their vulnerability to big moves from whale trading.

David Jagielski has no position in any stocks mentioned. The Motley Fool has a position in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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