Having to write an article about Shiba Inu (CCC:SHIB-USD) is both a challenge and an easy task for me — this altcoin is, in simple words, a joke. It has basically zero value and a long way to go to be ever considered as an investment.
I could end the article here. But I am going to mention some arguments about my verdict. After all, it is always a good idea as a financial analyst to have arguments to back up your investment conclusions.
What is Shiba Inu?
CoinMarketCap writes that “Once upon a time, there was a very special dog. That dog was a shiba inu, and this dog inspired millions of people around the world to invest money into tokens with the dog’s image on it.”
It goes on to say SHIB-USA considers itself the “DOGECOIN KILLER,” and that the altcoin is listed on the ShibaSwap exchange.
Shiba Inu was created by someone going by “Ryoshi” in August 2020. It “quickly gained speed and value as a community of investors was drawn in by the cute charm of the coin paired with headlines and Tweets from personalities like Elon Musk and Vitalik Buterin.”
The price of SHIB-USD is $0.000007674 as of August 12, 2021. Now the irrational exuberance starts when you take a look at its valuation. It has a market capitalization of $3,029,433,335. It has a rank of 40 on CoinMarketCap for altcoins based on their market capitalization and there are almost 400 trillion SHIB tokens in circulation, with a max supply of one quadrillion tokens.
When I noticed that, I was amazed. Both an enormous maximum supply, and a valuation that brings the term stock bubble or cryptocurrency bubble to mind. Why this madness for altcoins and especially Shiba Inu? It is not justified but who says that logic is present in financial markets all the time? If logic was always present, many bubbles and subsequent sell-offs would have been avoided.
The price of the Shiba Inu coin seems to follow and has a strong correlation with Dogecoin (CCC:DOGE-USD). Why? Because SHIB-USD is considered to be a spin-off of Dogecoin.
Now pay attention to this. Shiba Inu wants to be the “DOGECOIN KILLER.” And here is my best argument to support my opinion on why Shiba Inu is a joke and a worthless altcoin.
In my recent article about Dogecoin titled “5 Reasons, Every Investor Needs to Avoid Dogecoin” my verdict was “My choice is to avoid completely DOGE-USD. I have tried to find a single reason to write something positive about it. I have found none.”
I considered Dogecoin “ A Hustle, a Bubble and a Lesson in Investing.” And I believe its value is absolutely $0.
If Dogecoin has a $0 value accordant to my analysis then Shiba Inu should have a value of $0 as well. And this is supported by its whitepaper called WoofPaper v2.
WhitePaper: When Being Naïve Is Not an Investment Strategy
In its whitepaper, Shiba Inu mentions the following:
“We started from zero, with zero. It’s the spirit of our project to create something out of nothing.” And that “We Love Shiba Inu dogs.”
Now, I have nothing against the fact that they love Shiba Inu dogs. I am also a pet lover. But when you analyze that part about creating something out of nothing, it is self-explanatory that the original value of SHIB-USD is $0. Nothing. And that’s its future value too.
Invest for Fun Buying a SHIB Token?
Now I have read people saying, why not buy a small amount of the SHIB token, for fun? For example, with just $150. With this amount of money, you will get tons of SHIB tokens. What could go wrong?
First, you can lose $150.
Second, you invest in a worthless altcoin.
Third, consider the alternatives to buying SHIB tokens. With $150 you can get one share of Apple (NASDAQ:AAPL) — a company with great prospects and very good fundamentals, a global leader. Chances of losing 100% of your investment are almost none and you could get even a dividend for this one share. It’s the small amount of 88 cents, but it’s a real return.
Now weigh on the decisions to invest these $150 to Shiba Inu compared to Apple. What makes sense?
I would choose Apple. Every time.
When Logic Defies Sentiment in Investments
Sentiments in investing are seldom a good way to make sophisticated decisions, based on the risk-reward expectations.
Many people may consider buying SHIB-USD tokens. Just ask why. And give a solid reason. To speculate? Have fun? Support something that is an alternative form of “investment”?
If your answer is yes, I wish you the best of luck. But it’s not for me.
On the date of publication, Stavros Georgiadis, CFA 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.
Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.