Shiba Inu trades 90% below peak as analysts cite structural limits versus Bitcoin and Ethereum
Despite potential tailwinds from a T. Rowe Price ETF and the Shibarium network, The Motley Fool’s analyst team excludes the asset from its top 10 stock recommendations, highlighting its inability to match the scarcity and utility of major cryptocurrencies.
Shiba Inu, the canine-themed meme coin launched in 2020 as a parody of Dogecoin, is currently trading more than 90% below its all-time high. The token, which peaked at $0.00008845 in 2021, is now changing hands at approximately $0.0000057. This significant depreciation means that an investor who purchased the asset at its peak is currently underwater, although early adopters who bought in at its initial trading price of $0.00000000051 have seen substantial gains, with a $1,000 debut investment swelling to roughly $11.2 million before recent declines.
The asset faces structural headwinds regarding its supply and technological foundation. Unlike Bitcoin, which is valued for its scarcity, or Ethereum, which is utilised as a development platform for decentralized applications, Shiba Inu lacks both attributes. It was created as an ERC-20 token on the Ethereum blockchain with a total supply of one quadrillion tokens minted prior to its market debut. Ethereum co-founder Vitalik Buterin received over half of this initial supply, most of which he subsequently burned. As of the report's writing, the circulating supply remains at 589.5 trillion tokens, limiting its ability to be valued on scarcity grounds.
Furthermore, Shiba Inu does not possess its own Layer 1 blockchain, which restricts its native support for decentralized app development. Consequently, it is not supported by any spot price exchange-traded funds, a key differentiator from Bitcoin and Ethereum. These limitations have contributed to a sharp decline in performance; over the past 12 months, Shiba Inu’s price has fallen by more than 60%, significantly outperforming the percentage drops seen in Bitcoin, which declined by 30%, and Ethereum, which fell by 17%.
Proponents of the asset point to the Shibarium Layer 2 network as a counterbalance to these criticisms. Running on top of Ethereum, Shibarium supports smart contracts and is designed to accelerate Shiba Inu transactions. Additionally, there is potential regulatory tailwind from T. Rowe Price, which has added Shiba Inu and Dogecoin to its upcoming Price Active Crypto ETF. If approved and launched, this fund could attract new institutional and retail investors to the out-of-favour meme coins.
Despite these developments, analysts remain cautious about the asset's long-term viability compared to established cryptocurrencies. The Motley Fool analyst team has not included Shiba Inu in their recommended list of top 10 stocks, arguing that the token lacks sufficient utility and scarcity to keep pace with Bitcoin or Ether. The publication maintains that investors seeking high returns may find more merit in assets with clearer technological foundations or market dominance, noting that their top stock picks have historically delivered market-crushing outperformance.
