As of midday Dec. 19, the cryptocurrency industry sported a total market cap of more than $3.4 trillion. This puts the digital asset market’s value near record territory. Bullish behavior by market participants, particularly following the election results with the belief that a pro-crypto administration is taking over, has the investment community very excited about what’s to come.
While Bitcoin deservedly gets most of the attention, investors are also bidding up the prices of more speculative cryptocurrencies. Take a look at Shiba Inu (CRYPTO: SHIB). The meme token has soared 41% in just the past six weeks.
But as of this writing, it still trades a stomach-turning 80% below its peak from October 2021. Can Shiba Inu, which recently traded at about $0.000022, rally to reach the coveted $0.01 mark in 2025?
Inspired by the success of Dogecoin, Shiba Inu launched in August 2020 with the goal of offering more functionality than its dog-inspired peer. That’s why the cryptocurrency was built on top of the Ethereum blockchain, which makes it compatible with a wide range of decentralized applications.
Moreover, developers have been focused on introducing upgrades to the Shiba Inu network. Users might be able to buy virtual land in a proposed metaverse. And a Layer-2 scaling solution, known as Shibarium, aims to speed up transaction times and lower costs.
In theory, the fact that Shiba Inu is focused on technical updates should boost adoption. But that doesn’t appear to be happening, which is very discouraging for its long-term viability.
According to DappRadar, there’s only $23 million in total value locked (TVL) (money held in a DeFi protocol, indicating engagement and liquidity) on ShibaSwap, a decentralized exchange operating within the broader Shiba Inu ecosystem. That figure is essentially unchanged from 12 months ago.
Cryptocurrencies benefit from a first-mover advantage, huge scale, and network effects. When it comes to blockchains with extensive smart-contract functionality, Shiba Inu doesn’t hold a candle to Ethereum, which has $72.2 billion in TVL, almost tripling in the past year. This reality makes it easy to be pessimistic about Shiba Inu’s ability to introduce real-world utility.
But Shiba Inu does deserve some credit for becoming the world’s 14th most valuable crypto, with a market cap of about $13 billion. To be clear, this has only come about due to hype and speculation among traders looking to quickly cash in. After Shiba Inu’s price went absolutely bonkers during the 2021 bull run, we might be seeing similar trends play out again right in front of our eyes, with fear of missing out (FOMO) and greed driving market behavior.
