Despite seeing a roller coaster of ups and downs over the past year, Shiba Inu (SHIB -0.12%) remains one of the most talked-about cryptocurrencies.
While many have written the crypto off as nothing more than a meme coin, others are still hopeful that it could be preparing for a comeback. With its price down substantially, is now the time to invest? And could it put you on the path to becoming a millionaire?
Taking steps in the right direction
Shiba Inu rose to fame in 2021, exploding in popularity essentially overnight. However, it’s currently down nearly 87% from its peak. Developers have also been working hard to prove that Shiba Inu is more than just a pump-and-dump scam, as some critics have branded it.
One of Shiba Inu’s most promising projects is Shibarium, a Layer 2 solution designed to help Shiba Inu reduce its transaction fees and improve its speed. This will make it far more attractive to developers looking to build decentralized applications (dApps) on the blockchain.
In addition, Shibarium will likely introduce a built-in coin-burning mechanism, which will remove Shiba Inu coins from circulation. A reduced supply will inherently make the crypto more valuable — and potentially help its price eventually reach the $1 mark.
Nobody knows for certain when Shibarium will launch. Experts previously expected a public beta launch in the third quarter, but now that we’re officially in the fourth quarter with no launch date yet, it’s unclear exactly when developers plan to release the update.
Regardless of when it launches, Shibarium will be one of the biggest updates for Shiba Inu to date. This could help the crypto shed its meme coin image and prove that it has real-world utility, which is exactly what it needs to do to continue growing.
Is Shiba Inu still a good investment?
While Shiba Inu has been making promising steps in the right direction, it still has a long way to go.
The crypto market is cutthroat, and despite being a household name, Shiba Inu is still a relatively small cryptocurrency. Its market cap is just $6 billion, far smaller than Solana (SOL -0.90%) at $12 billion, Cardano (ADA -0.48%) at $14 billion, and Ethereum (ETH -1.15%) at a whopping $167 billion.
It also has its reputation to overcome, which could make growth even more challenging. Unlike its competitors, Shiba Inu was created with no real purpose. The crypto was launched as a joke to poke fun at Dogecoin (which itself was created to mock Bitcoin).
Now, it has to backtrack and create a purpose for itself if it wants to be taken seriously. While developers have been working hard to do just that, many investors are skeptical that Shiba Inu will ever be more than just a meme coin.
For that reason, Shiba Inu has an extra challenge that its competitors don’t, which will make it all the harder for it to succeed.
Risks to consider
Those who are bullish on Shiba Inu say that now is a fantastic time to buy. Not only is its price down substantially, but with Shibarium on the horizon, it could be poised for a huge boost.
However, Shiba Inu remains an incredibly risky investment. All cryptocurrencies carry a certain degree of risk, but Shiba Inu has several hurdles in its path to growth.
Even if Shibarium is a smashing success and Shiba Inu is able to dramatically reduce its transaction times and fees, it will still face stiff competition. Ethereum is the clear leader in the dApp space, and there are plenty of other blockchains (such as Cardano and Solana) all competing for their share of the dApp market.
To keep up, Shiba Inu will need other competitive advantages that set it apart from the crowd. While that’s not impossible, it won’t be easy — especially as it tries to overcome its meme coin reputation.
If you choose to invest, be sure to go into it with realistic expectations. There’s always a chance it could see another round of explosive growth. However, it’s unlikely this crypto will make you a millionaire, and it’s best to be careful with an investment as risky as Shiba Inu.
Katie Brockman has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.