Should You Buy Shiba Inu While It's Less Than a Penny?

This year has been wonderful for the stock market, as the S&P 500 and the Nasdaq Composite Index have risen by 15% and 19%, respectively (as of June 27).

Despite a strong performance by the stock market this year, with the S&P 500 and Nasdaq Composite rising 15% and 19%, respectively, the cryptocurrency market has outperformed significantly.

The total market cap of digital assets stands at $2.3 trillion, up 35% from the beginning of the year. This bullish backdrop has benefited highly speculative tokens like Shiba Inu (CRYPTO: SHIB), which has soared 63% in 2024.

However, Shiba Inu remains 80% off its peak price. So, does this make the cryptocurrency a smart buy while it trades for less than one penny? Let's take a closer look.

Hype over substance

Shiba Inu is now the 13th most valuable blockchain network in the world, with a market value of $10.3 billion, despite being launched just four years ago in August 2020.

This achievement might lead some to believe that Shiba Inu has found widespread adoption and real-world utility, but I don't believe this to be the case. The token is rarely used to facilitate transactions.

To be fair, Shiba Inu's founders intended for the network to have greater functionality than its inspiration, Dogecoin. Hence, Shiba Inu is built on top of the Ethereum blockchain, making it compatible with a wide range of decentralized applications.

However, it's still safe to assume that Shiba Inu lacks utility, as crypto enthusiasts can use more popular tokens like Ethereum, Cardano, or Solana, which have deeper developer networks and offer better services.

The only reason I can think of for someone to consider buying Shiba Inu is to speculate on its price in the short term. But as we've observed throughout its history, price movements are largely driven by hype cycles, which are impossible to predict.

For instance, Shiba Inu enjoyed a massive surge during a week-long stretch in late February and early March. However, the token has cratered since hitting that 2024 peak. This is the reality of owning such a volatile asset.

Better options to buy

When compared to the nearly infinite number of cryptocurrencies available, Shiba Inu lacks a true competitive edge. As a result, there are more promising options to consider.

I've already mentioned Ethereum. At the end of 2023, this network had 2,392 full-time developers working on it, more than any other blockchain.

Its aspiration is to become the world's decentralized computer, and while this goal is still a long way off, it has a much higher chance of existing 10 years from now than Shiba Inu does.

In my opinion, Bitcoin is perhaps the best cryptocurrency that investors can add to their portfolios. It is completely decentralized and has a fixed supply cap of 21 million coins, making it a digital gold of sorts.

This stands in stark contrast to the setup of Shiba Inu, which has a massive 589 trillion coins in circulation. It's no wonder that its current price of $0.00001746 is so incredibly low.

Finally, investors seeking the potential for outsized returns may also want to consider buying growth tech stocks. These seem like a much safer place to put your money than Shiba Inu.

That's because these businesses sell products and services that customers actually pay for, with the possibility of generating higher revenue in the long run.

So, while Shiba Inu trades well below one penny right now, investors should avoid it like the plague.

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