The Shiba Inu crypto coin is suddenly popular. Even today (28/10/2021), the digital coin, dubbed the Dogecoin Killer, touched an all-time high of US$0.00008845 per coin.
According to Coinmarketcap, Shiba Inu now has a market cap of US$44.33 billion. It is ranked 8th as the cryptocurrency with the largest market capitalization in the world. Shiba Inu has a 1.77% market share, quoted Thursday (28/10/2021).
Financial planners suspect the high public interest in Shiba Inu because the price is very cheap. Even though they are cheap, they advise people to do research before investing.
"Before investing in cryptocurrencies, it's important to understand what they are investing in and the risks, don't go with the flow," said Douglas Boneparth, President of Bone Fide Wealth, as quoted by CNBC International.
Here's the information you need to know about the Shiba Inu cryptocurrency:
What is Shiba Inu
Shiba Inu was launched in August 2020 by an anonymous person named Ryoshi. This coin is inspired by the Shiba Inu dog. According to Coinmarketcap, Shiba Inu's return on investment (ROI) has reached 4,656,373.7%.
Shiba Inu is built on Ethereum's ERC-20 token, which means it's created and hosted by the Ethereum blockchain, not the blockchain itself.
According to the Shiba Inu White Paper or what is often referred to as the woof paper, Ryoshi decided to launch Shiba Inu on Ethereum because the system was "safe and established".
The Shiba Inu has a total supply of 1 quadrillion. Ryoshi claims nearly half of its supply is locked in a liquidity pool on the Uniswap decentralized exchange. The rest was sent to the co-founder of Ehtereum, Vitalik Buterin.
Shiba Inu risk
“Altcoins like Shiba Inu are community based, which means their success depends to a large extent on the success and growth of their community rather than their utility,” said Douglas Boneparth, who has invested in bitcoin since 2014.
Experts warn that any cryptocurrency investment can result in the loss of the entire investment. They generally recommend that you only invest funds where you can afford to receive them when they are completely gone.
But altcoins may require additional caution because of their differences from established cryptocurrencies. Bitcoin, for example, was launched in 2009 with the intention of being used in a peer-to-peer financial system.
The blockchain is carefully crafted, with a well thought out ecosystem. Bitcoin also has a finite supply, which allows for scarcity and keeps its price under control.
Because of this, Bitcoin is seen as a store of value by its holders, who also expect it to become a decentralized digital currency. Most altcoins do not have this characteristic.
Brett Harrison, president of cryptocurrency exchange FTX US revealed that instead of investing in cryptocurrencies that are soaring based on hype, he prefers crypto assets with special utility.
“There are a number of crypto assets suitable for retail users, whose investment prospects can be linked to their ability to provide a store of value, to facilitate efficient payment transfer mechanisms, or to support the protocols used to build blockchain-based applications,” he said.