Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Shiba Inu Coin Could Easily Go to $0

Stock Markets Jun 30, 2022 08:45
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters Shiba Inu Coin Could Easily Go to $0

Shiba Inu Coin (CRYPTO:SHIB) was one of 2021’s most popular meme coins. Rising several million percentage points in just over a year, it delivered an even bigger rally than Dogecoin (CRYPTO:DOGE), its more famous cousin. Last year, people got obsessed with joke/meme coins after Elon Musk began pumping them on social media. This year, however, they’re not doing so well. SHIB is down 67% for the year, and other meme coins are delivering similar results.

In this article, I will explore all the different factors that make SHIB a bad buy, ultimately concluding that it could potentially go to $0.

SHIB has no intrinsic value The first thing to note about Shiba Inu Coin is that it has no intrinsic value. That is to say, there are no cash flows underlying it. Normally, investments are valued based on the cash they hold, including future cash earnings. Shiba Inu Coin doesn’t have any of that. Neither do any other cryptocurrencies or even fiat currencies, for that matter. But whereas the USD and, to a lesser extent, Bitcoin are used in real-world transactions, SHIB has little use outside of speculation.

Limited use as a currency Shiba Inu Coin does not appear to be used extensively as a currency. Bitpay has a list of companies that accept it, and it appears there are only a few dozen of them. Also, Bitpay only mentions that these companies accept SHIB in exchange for gift cards, it doesn’t say anything about in store purchases. So, Shiba Inu Coin doesn’t appear to have much of an anchor in real-world commerce.

Interest rates rising Another factor that could lead to more selling in Shiba Inu Coin is rising interest rates. When interest rates go up, crypto prices tend to go down. Higher interest rates make borrowing more expensive and provide higher yields on low-risk investments like GICs. These two factors combine to make crypto less desirable as an investment in high-rate environments. They affect highly speculative cryptos like SHIB more severely than their established peers, as these cryptos typically have less grounding in real-world, non-speculative transactions.

No Elon Musk Last but not least, Shiba Inu Coin suffers from a lack of celebrity promoters. The price of Dogecoin recently rose after a year of weakness, when Elon Musk mentioned on Twitter (NYSE:TWTR) that he was still buying it. Crypto prices are largely a product of social media sentiment, and DOGE has got the highly influential Musk backing it.

SHIB has no such advantage. It’s largely a Dogecoin copycat, but without the blessing of the world’s richest person. For this reason, there is much less happening on social media that could attract attention to SHIB, when compared to DOGE. It has the aura of an “also ran” meme coin.

Foolish takeaway Shiba Inu Coin has taken a beating this year, and there’s no telling when the selling will end. The coin isn’t really used much as a currency, and economic developments this year are disincentivizing speculation. Bigger cryptocurrencies that are used in the real world could easily survive this rout. SHIB, however, could go to $0.

The post Shiba Inu Coin Could Easily Go to $0 appeared first on The Motley Fool Canada.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Bitcoin and Twitter.

This Article Was First Published on The Motley Fool

Shiba Inu Coin Could Easily Go to $0
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email