Shiba Inu has seen significant instability in its short history, which usually increases more than ten times in a few days.
SHIB / USD is currently trading near $ 0.000008, over 90% lower compared to the high of October 2021 at $ 0.000008.
If cryptocurrencies recover and SHIB developers offer utility to the ecosystem, a challenge to the 2021 highs before 2025 is likely.
A Brief History of SHIB
Shiba Inu, the second largest dog-inspired memecoin based on capitalization after Dogecoin and calling itself the “Dogecoin killer”, has a short history. The ERC-20 badge was released on the Ethereum blockchain by the pseudonymous creator “Ryoshi” in August 2020 and spent the first months of its life in relative obscurity.
Shiba Inu’s rise to fame began during the meme stock craze in early 2021, which also coincided with the explosive rise in Dogecoin. Over the course of a few days in April 2021, the SHIB / USD rose almost twenty-fold in value from below $ 0.0000002 per coupon to around $ 0.0000037, before then falling to around $ 0.0000015.
The story was to be repeated less than a month later, with SHIB / USD rising more than twenty times in value from around $ 0.0000015 to $ 0.000035 in just a few days in early May. The SHIB / USD then consolidated in the $ 0.000006-0.000008 range until another explosive upward move in October 2021.
SHIB / USD increased tenfold in value between October 1, when it changed hands below $ 0.000008 and October 27, when it reached $ 0.00008. This move really put Shiba Inu on the map, as at its monthly peak, its market capitalization slightly exceeded that of its competitor Dogecoin and exceeded $ 41 billion.
A significant deterioration in the cryptocurrency market since last November as a result of the deteriorating global economy (rising inflation and weakening growth) and more aggressive central banks has led SHIB / USD to fall more than 90% from the top October 2021. The cryptocurrency was last traded at around $ 0.000008 per token and within the $ 0.000005-0.000010 range that prevailed for much of 2021.
What will follow for SHIB?
Despite its short history, there is no doubt that Shiba Inu is here to stay given the strength of the community and its fan base. Shiba Inu’s official Twitter account has over 3.4 million followers, in third place along with Dogecoin and behind only Binance and Bitcoin. Meanwhile, on the social intelligence encryption data site LunarCrush, Shiba Inu consistently ranks in the top ten cryptocurrencies in terms of social site dominance, social commitments and social reporting measures.
Shiba Inu investors will have to be patient, but ultimately global macroeconomic and financial conditions will need to improve (most economists believe). The world central banks may be able to start lowering interest rates as inflation returns to control in 2023/24.
When the macroeconomic outlook for wider cryptocurrency markets begins to improve, Shiba Inu is likely to be the main candidate for outperformance, given the aforementioned strong brand and reputation of Dogecoin’s competitor.
The short and volatile history of the badge makes it difficult to identify long-term technical trends. But if recent history is a lesson, SHIB / USD reserves the potential to rise rapidly by more than ten times in just a few days, if the conditions are right.
Many long-term HODLers will wait patiently for such a move, perhaps only in late 2022 or 2023 if the inflation outlook / outlook for central bank policy is drastically improved and the October 2021 highs eliminated.
However, a return to the highs of October 2021 indicates a recovery of SHIB’s capitalization to over $ 40 billion. In the absence of the Shiba Inu token that will offer its investors real utility, it is difficult to justify why the token market capitalization will have to increase much more from now until 2025.
This means that innovation by developers working to expand the Shiba Inu ecosystem in the coming years will be vital. Since its release in July 2021, Shiba Inu’s ShibaSwap Decentralized Exchange (DEX) / Decentralized Finance (DeFi) platform has largely failed to gain traction.
As of Monday, the Trade Value Locked (TVL) on the platform is below $ 30 million, well below the high above $ 650 million last November. Developers will need to improve their gameplay to attract streaming back to the platform when the wider DeFi market recovers in the coming years. A potentially big short-term positive catalyst for SHIB could be the release of the Shibarium converter later this year.
This article was originally published in FX Empire