Ethereum whales recently flocked to last year’s star token: Shiba Inu ( SHIB -1.41% ). Although the cryptocurrency has fallen 33% since the start of the year, it has climbed 45,000,000% in 2021.
As big Ethereum holders turn their attention to Shiba Inu, is a rebound in sight? Should you join these whales and dive into this attention grabbing cryptocurrency right now?
The biggest holders
First of all, “whales” are investors who own a large amount of cryptocurrency. In this case, we are talking about those who specifically hold Ethereum. Bitcoin and Ethereum may be the largest and most established cryptocurrencies, but new tokens continue to be released at a rapid pace, and their list now exceeds 18,000.
Today, Shiba Inu is the third-largest holding among Ethereum whales, according to WhaleStats, a website dedicated to tracking the 100 largest Ethereum wallets.
It is clear that Shiba Inu can exert a certain attraction because of its extremely low price. Even after the massive gains of 2021, it is trading for less than $0.000023 – not even a hundredth of a cent. Such a low valuation opens the door to a wide range of investors. And if more and more people buy Shiba Inu, the holders of the tokens could make more and more profit. So the whales may be betting on the ultra-low Shiba Inu price to attract investors again as they have for much of the past year.
The whales could also bet on two potential catalysts. This year, Shiba Inu plans to launch a Layer 2 scaling solution and enter the metaverse.
Let’s first look at this scaling solution, called Shibarium. Currently, as a token on the Ethereum blockchain, Shiba Inu faces the same issues as Ethereum: high transaction costs and network congestion. Once Shiba Inu tokens are migrated to Shibarium, these issues should be a thing of the past. As for the metaverse, Shiba Inu recently said that he will soon start selling virtual land there. He has yet to reveal the name of his metaverse project, but he has promised to do so soon.
A short-term boost
Both of these projects could give Shiba Inu a boost. And if they are successful, payoffs could occur at times down the road.
Now back to our question: Should we follow Ethereum whales and invest in Shiba Inu? Like any cryptocurrency, Shiba Inu will have its share of good days and bad days. There is always the possibility that you could buy at the right time, see its value increase on positive news about Shibarium, for example, and then sell your tokens for a profit.
But I’m looking at it from a long-term investment perspective. And from there the view is not so bright. Shibarium and the Metaverse Project are positive efforts. But they are not enough to help Shiba Inu stand out from his rivals. Many other players are already reshaping the world of business and entertainment. They run decentralized applications (dApps) across industries. Through these, people can buy insurance, lend money or invest.
The main uses for Shiba Inu are trading, staking and paying at a limited number of merchants – and there are no signs that this will change any time soon. This means that there is no concrete reason to believe that Shiba Inu will be among tomorrow’s crypto winners. And that’s why, as Ethereum whales dive into Shiba Inu, we better watch from the water’s edge.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.