Bitcoin
Shiba Inu is outperforming Bitcoin in 2024 and it’s not even close. But does that make it a purchase?
Capital markets are off to a hot start so far in 2024. S&P 500 It is Nasdaq Composite They each gained approximately 11% thanks to the euphoria of artificial intelligence, a strong energy market and new advances in the pharmaceutical sector.
However, investors have plenty alternative options outside the capital markets. In recent years, cryptocurrency has emerged as a popular choice for investors beyond stocks and bonds.
With its price rising 69% so far this year, Bitcoin (CRYPTO:BTC) easily outperformed the broader market.
And yet, you would be surprised to know that there is another crypto token outperforming Bitcoin this year? As of the market close on May 20, the price of Shiba Inu (CRYPTO:SHIB) soared 136% – almost double Bitcoin.
Let’s analyze whether Shiba Inu is right for you and whether the token represents a more profitable option than Bitcoin for crypto investors.
Bitcoin x Shiba Inu: what to know before investing
When it comes to cryptocurrency, Bitcoin is probably the best known. Although it is not yet completely a staple among modern monetary transactions, Bitcoin is becoming increasingly used and accepted as a means of payment.
While crypto generally has a more polarizing reputation compared to more established asset classes, Bitcoin is often referred to as “digital gold” due to its reputation as a unique value during volatile economic periods.
Outside of Bitcoin, there are numerous cryptocurrencies. A common misconception is that each of these tokens represents a competing product to Bitcoin. This is not actually the case. In fact, many cryptocurrencies lack any real utility and become relevant for the wrong reasons.
You may remember that a token called Dogecoin it briefly came onto the scene a few years ago after personalities like Elon Musk and Mark Cuban apparently endorsed its applications.
While a degree of humor can be appreciated here, prominent CEOs and investors should refrain from commenting on anything too specific about the markets.
The reason? Well, following the approval of Dogecoin by several billionaires, amateur retail investors invested in the token. This resulted in an outsized boost that fueled the price of Dogecoin, leaving many investors holding the bag.
This is where Shiba Inu comes into the picture. Just like Dogecoin, Shiba Inu is classified as a meme coin. It is not considered as prolific or sophisticated as Bitcoin, and its price reflects this.
With 1 quadrillion tokens in total supply, Shiba Inu is currently trading at a price of $0.000026. Since the value is less than a penny, Shiba Inu is essentially worthless.
The story continues
At a price of approximately $69,000, Bitcoin is very much determined by supply and demand. In contrast, the prices of Shiba Inu and most meme coins are just a reflection of their current sentiment on social media.
Image source: Getty Images.
The end result
While Shiba Inu’s percentage return so far in 2024 looks impressive, this is clearly an example of the law of small numbers. In other words, a triple-digit return can lend credence to a profitable opportunity. However, the Shiba Inu’s positive potential is probably more psychological than real.
Furthermore, given the number of tokens changing hands, it will take a huge number of bullish investors to buy (and hold) Shiba Inu before its price reaches even a cent – let alone a dollar.
While crypto is widely considered a risky investment compared to stocks or bonds, investors may want to consider some exposure for diversification purposes.
But that being said, I would encourage investors to avoid meme coins. A good analogy would be to consider meme coins similar to penny stocks.
As with stocks, cryptocurrency investors should look for established and proven opportunities. Right now, Bitcoin has the edge in these respects and is a much safer choice than Shiba Inu – regardless of what the percentage returns look like at first glance.
Should you invest $1,000 in Shiba Inu now?
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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin. The motley fool has a disclosure policy.
Shiba Inu is outperforming Bitcoin in 2024 and it’s not even close. But does that make it a purchase? was originally published by The Motley Fool