2021 has been another incredible year for the cryptocurrency industry. There has been a tonne of top performers this year, and investors have seen some massive returns. One of the most popular cryptocurrencies as of late has, of course, been Shiba Inu.
Shiba Inu rose to glory in many respects because of its ties to Dogecoin. The dog on the Dogecoin symbol is a Shiba Inu breed, and many of the investors who bought Doge during its run up are now speculating on the potential of Shiba Inu.
With cryptocurrencies, there can be a lot of speculation and fear of missing out. Some investors buy coins just because they are being hyped up or because they gain rapidly.
However, without solid fundamental reasons why these cryptocurrencies should rise in value, it makes it an extremely risky investment. At any point, the rug can get pulled, and these speculative cryptocurrencies can start to fall rapidly.
Dogecoin, for example, hasn’t come anywhere near its all-time high in months. And now Shiba Inu has been on a consistent downtrend for weeks, currently off its all-time high by roughly 40%.
This selloff in Shiba Inu doesn’t necessarily mean it can’t rise in price again. But who knows if it will or when it could happen? There aren’t any strong fundamental reasons for an investment, it becomes too risky to buy Shiba Inu and hope for the rally in the crypto to continue.
Plus, the opportunity cost of not owning other high-quality cryptocurrencies is massive too. So, if you’re looking for a high-potential cryptocurrency to buy today, forget Shiba Inu. Fantom offers a lot more opportunities for growth.
Why does Fantom have more upside than Shiba Inu? Shiba Inu is simply what’s called an ERC-20 token. That means that it’s a cryptocurrency that runs on the Ethereum blockchain rather than its own. Fantom, however, is its own Blockchain network that has smart contract functionality. The Fantom token is the native coin that powers the blockchain.
Essentially, Fantom is a major competitor to Ethereum. However, because Fantom is Ethereum Virtual Machine (EVM) compatible, developers who create decentralized apps (DApps) for the Ethereum network can easily deploy them on Fantom.
This is crucial because it’s what allows Fantom and any other blockchain network that is EVM compatible to grow alongside Ethereum and its major popularity.
Plus, right now, it’s far superior in terms of cost. At times, it can still cost anywhere from $100 to $200 or more to use Ethereum’s network.
In comparison, Fantom costs just cents. This gives users a tonne of advantages. And the more users that are drawn to Fantom’s network, the more its token is demanded. This gives it a tonne of long-term upside, much like Ethereum.
What are the use cases of Fantom? With cryptocurrencies and specifically the creation of decentralized finance (DeFi), it’s not just about buying these tokens to hold and go up in value like you would with stocks. That’s a major part of investing in cryptocurrencies, and you certainly don’t want to own assets that are consistently losing value. But it’s also important to buy tokens that you can put to work or have some use case.
With the Fantom token, in addition to holding it while it appreciates, you can stake it, spend it, use it to contribute to governance decisions and more.
So, not only does Fantom offer the potential for investors to grow their money thanks to DeFi, but as the demand for the Fantom token continues to grow, it should only continue to appreciate in value.
Therefore, rather than speculating on a highly risky investment like Shiba Inu, I’d strongly consider investing in cryptocurrencies that have real opportunities for years of sustained growth.
The post 1 Cryptocurrency With More Upside Than Shiba Inu appeared first on The Motley Fool Canada.
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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