Shiba Inu Price Prediction: All Bark, No Bite?

Shiba Inu, a dog-themed meme coin that popped up in 2020, quickly made waves in the digital world and, years later, is still in the top 20 largest cryptocurrencies by market cap.

Shiba has experienced extreme ups and downs, riding the tide of social media buzz and nods from big names, including devoted fan, Elon Musk. But what does the future hold for Shiba Inu?

Analysing expert opinions and comparing the positives and negatives give us a clearer picture of this big name in the meme coin family.

Shiba Inu's Price History

The story of Shiba Inu, as explained by Market Analyst at Conotoxia, Grzegorz Drozdz, is a classic example of the unpredictable and volatile nature of meme coins in the digital asset market.

Shiba Inu (SHIB) was born into the meme coin category in August 2020 by an anonymous creator known only as ‘Ryoshi’. It’s part of the dog-themed cryptocurrency family, an interesting sub-section of the crypto market that includes Dogecoin (DOGE) and Baby Dogecoin (BabyDoge). Despite their meme origins, they’ve garnered serious attention from investors.

“The cryptocurrency quickly gained popularity mainly due to the support of celebrities such as Elon Musk. Its success has led to the creation of many copies, but Shiba Inu remains the most recognisable of these cryptocurrencies,” Drozdz points out.

The price history of Shiba Inu is a testament to its roller-coaster journey. Musk’s endorsement brought it into the limelight, driving its price up by a staggering 4,000% in just three months, reaching a peak of US$0.000035. However, the high didn’t last long. The meme coin plunged, wiping off 90% of its value.

“Following the initial hype, there was a second, even larger rally six months later. This was prompted by Musk’s announcement that Tesla electric cars could be bought with Dogecoin, leading to Shiba Inu’s price rallying to US$0.000075, a 1200% increase,” Drozdz recounts. However, the subsequent period has seen a steady drop in value, with the coin losing around 90% of its peak value.

This volatile past illustrates the highs and lows of meme cryptocurrencies and provides a backdrop to consider future predictions. What’s clear is that Shiba Inu’s price history has been heavily influenced by external factors, including social media sentiment and celebrity endorsement, a factor that cannot be overlooked when making future price predictions.

How Will Shiba Inu Perform in 2023?

Forecasting the performance of cryptocurrencies, especially the likes of Shiba Inu, is a challenging task. As Drozdz explains: “It is difficult to predict how the cryptocurrency will behave this year.” There are, however, certain elements that could influence its trajectory.

Firstly, a broader bull market for cryptocurrencies can uplift Shiba Inu’s value in the same way a rising tide will lift all ships. As more investors and institutions recognise the potential of digital currencies, it creates a favourable environment for all cryptocurrencies, including Shiba Inu.

The second crucial aspect, according to Drozdz, is the popularity of meme coins. These coins often experience sudden surges in interest due to social media trends and celebrity influence. However, the duration and stability of this popularity are tough to ascertain. “It is difficult to predict how long this popularity will last,” Drozdz says.

Another important variable to remember is unforeseeable occurrences, like Elon Musk’s tweets, which have a history of inducing price volatility in the cryptocurrency market. Drozdz therefore cautions that investing in Shiba Inu involves considerable risk. He adds: “predicting its price is particularly difficult compared to, for example, Bitcoin.”

While Bitcoin has more data points and a longer history to help inform predictions, Shiba Inu’s relative newness and the highly volatile environment in which it operates make its future performance harder to forecast.

What Does the Future Hold for Shiba Inu?

The Bull Case

When it comes to reasons to be optimistic about Shiba Inu’s future, Drozdz points towards its trending nature and the overall positive market sentiment. “The main factor that meme coin investors are watching is its popularity on social media. Elon Musk’s tweets have been particularly key historically,” he explains.

The relationship between social media trends and meme cryptocurrencies can’t be overstated, and Shiba Inu has demonstrated this correlation in its past performance. As long as it continues to enjoy celebrity endorsements and remains a topic of discussion, there’s potential for price surges.

Furthermore, “another factor that could positively influence potential rises on Shiba Inu is the recent 80% increase in the largest cryptocurrency, Bitcoin, since the beginning of the year,” Drozdz adds. The performance of Bitcoin often sets the tone for the rest of the crypto market. If Bitcoin continues on an upward trajectory, it may very well pull other coins, including Shiba Inu, along with it.

Adding  to the bull case for Shiba Inu is the anticipated arrival of “Shibarium”. This upcoming layer-2 (L2) blockchain network built on Ethereum is intended to transform Shiba Inu from a simple meme coin into a comprehensive ecosystem. Shibarium, was first proposed in May 2021 by Shiba’s anonymous creator in a now deleted post, and is currently in beta test net phase.

While Shiba Inu, like other meme coins, is characterised by high volatility and a huge total supply of 1 quadrillion coins, the introduction of Shibarium could potentially restructure and stabilise Shiba’s standing. Though the release was delayed for thorough testing, the Shibarium development holds promise of redefining Shiba Inu’s position in the cryptocurrency market.

The Bear Case

While popularity can work in Shiba Inu’s favour, it could also be its undoing. According to Drozdz: “Shiba Inu’s biggest disadvantage seems to be at the same time its biggest advantage—fashion and popularity.”

The meme coin market is constantly evolving, with new coins being created almost daily. “There have been many similar designs since Shiba Inu was created, which in turn reduces the potential for Shiba Inu to become another seasonal favourite,” Drozdz says.

Pepecoin is a recent meme coin that made waves in the crypto market, shooting up from a market capitalisation of under $US1 million to shooting way over $US1.5 billion in a matter of weeks. While some lucky investors made some crazy gains, many more lost substantial sums of money once the project fell drastically after the initial eye-watering run-up.

The competition from these newcomers could potentially dilute Shiba Inu’s market share. As a result, the whims of the meme coin market and the constant competition from newer coins could push Shiba Inu into the shadows. Ultimately, it’s a double-edged sword, with its popularity and trending status both powering its growth and posing a potential threat to its future value.

Is Shiba Inu a Good Investment?

Assessing the viability of a cryptocurrency investment can be challenging due to its inherent volatility and unpredictable nature. When it comes to Shiba Inu, Drozdz emphasises considerable caution.

“Given the factors outlined that can affect the cryptocurrency’s price and its characteristics, it is important to emphasise that it is not a good investment for the vast majority of investors,” he says. This caution stems from the fact that Shiba Inu has demonstrated considerable price fluctuations in the past, with its value falling by more than 90% on several occasions.

Despite favourable circumstances in the broader crypto market, such as Bitcoin’s price surge, investing in Shiba Inu may not be a wise choice for everyone. Drozdz adds: “Despite a positive environment, such as increases in the price of Bitcoin, investing in Shiba Inu does not appear to be a good option at the moment.”

While Shiba Inu has had its moments in the limelight and may continue to have such moments in the future, the coin’s volatility makes it a risky venture. It’s a play that might suit those with a high risk tolerance and an appetite for the unpredictable nature of the memecoin market, but for the average investor, the instability and unpredictability might outweigh the potential for high returns.

As always, anyone considering investing in cryptocurrencies should do their own research, understand their risk tolerance, and consider seeking advice from a financial advisor.