Could Investing $100 in Shiba Inu Make You a Millionaire?

Investors are looking to put money to work in the cryptocurrency market because of the possibility of making huge profits. Perhaps this need for high earnings drives them to more speculative tokens.

Shiba Inu (SHIB -2.09%) definitely falls into this category. It has climbed enough to become the 13th most valuable cryptocurrency in the world, now valued at $8 billion.

But could investing $100 right now in your Shiba Inu someday make you a millionaire?

Shiba Inu’s past

Historically, the Shiba Inu has proven to be an incredibly profitable gamble. The token was launched in August 2020. And by the end of October 2021, it had skyrocketed by almost 8,800,000%. This was on the back of a strong year not only for the cryptocurrency market, but also for the stock market.

But the bubble burst, and Shiba Inu felt the pressure. Despite seeing a surge earlier this year, the token is now trading at 85% of its all-time high nearly three years ago. Investors have absolutely killed themselves with the digital asset.

Even though the Shiba Inu took its owners on a wild ride, it still recorded a total return of over 1,300,000% (as of September 3rd). This means that if you invested only about $75 in Shiba Inu in August 2020, you would be a millionaire today.

The stock market did much worse. For the sake of comparison, S&P 500 produced a total return of 84% over the same time period of just over four years.

The future of the Shiba Inu

The Shiba Inu was launched to be a more functional version of its dog-inspired predecessor, Dogecoin. That’s why the Shiba Inu is built on top Ethereum network, making it compatible with a wider range of decentralized applications.

You might think this bodes well for Shiba Inu’s future, as I believe all cryptocurrencies need to start finding compelling real-world use cases to increase their long-term viability. However, this is where the Shiba Inu leaves a lot to be desired.

According to cryptwerk.com, the token is only used as a payment method at 965 merchants worldwide. It is about a tenth of the number of seats Bitcointhe oldest and most valuable cryptocurrency in the world, can be used. And it’s a small drop in the bucket compared to Visawhose cards are accepted at 130 million merchants.

Of course, there could be other use cases besides just being used as a value transfer method. Users can buy virtual terrain in the Shiba Inu metaverse, for example. However, I don’t see that there is much lasting demand for this type of activity, as it probably only interests a very small group of people.

Looking at its history, it is clear that Shiba Inu, like Dogecoin, follows various hype cycles. A tweet from adze founder and CEO Elon Musk may send the token’s price soaring in no time. But even faster than it rose, it can fall back when the excitement fades.

Consequently, there really aren’t any valid reasons to want to buy and keep a Shiba Inu. Therefore, I think the Shiba Inu is a poor place to park your hard-earned savings. So it’s no surprise that I don’t think there’s a chance that a $100 investment will one day turn into a million dollars thanks to this dog-themed token. Even if you put more capital up front, the chances are slim.