Shiba Inu might bounce back, but right now, it is slowly entering a sell-off zone and nobody can save it.

In 2021, Dogecoin killer, Shiba Inu, was in the spotlight. Shiba Inu is an altcoin created by a pseudonymous entity named Ryoshi in August 2020. Like many other cryptocurrencies, Shiba Inu's name was inspired by a dog breed. According to its white paper, which is known as the "woof paper" in the SHIB community, the founder launched Shiba Inu on Ethereum because the blockchain is well-established and secure. Shiba Inu witnessed tremendous growth of almost 700% since the beginning of the second quarter of 2021 and was seen rivaling Dogecoin, the interest value of which increased immensely after the intervention of tech giant Elon Musk. But this rally came to an end due to the sudden market crash at the end of 2021, leaving investors to wonder if they should buy, hold, or sell Shiba Inu at this condition. This article features how and why SHIB is slowly entering a sell-off zone and nobody can save it.

Shiba Inu's fundamentals are still weak

At the end of the day, demand is hugely influenced by fundamentals. And Shiba Inu's fundamentals are still quite weak. As a token on the Ethereum network, SHIB doesn't have as much design flexibility as other large cryptocurrencies, causing it to suffer Ethereum's network challenges like soaring fees — which can reach as high as US$30 per transfer.

Shiba Inu's developers will have to wait until Ethereum's planned upgrade (called the consensus layer) to resolve these challenges. And it is unclear when that will actually go live. In the meantime, Shiba Inu is attempting to expand its functionality through new projects like Shiberse, an immersive metaverse experience for the SHIB ecosystem.

In February, developers announced Shiba Lands, which will be virtual real estate available for purchase. But the land can only be purchased using a token called Doge Killer (CRYPTO: LEASH), which is not the same as SHIB. And it is unclear if this metaverse project will boost demand for SHIB — aside from just creating hype.

Experts say the community growth is fake

Shiba Inu backers have carefully cultivated an online community that focuses on trading and promoting cryptocurrency and related NFTs. Now, they have taken a step further by attempting to restrict the SHIB supply and increase its market value. The community members destroyed over 239 million and 400 million tokens respectively in December and November. But no matter how many tokens they burn, the demand keeps falling at a potentially higher rate, resulting in a market crash.

SHIB possesses no edge over others

Shiba Inu is an ERC-20 token that is built on top of Ether's blockchain. While this makes it interoperable with the Ethereum network as well as with DApps running on it, Shiba Inu is constrained by the limitations of the bigger blockchain. And for a programmable blockchain that utilizes smart contracts like Shiba Inu, it's all about attracting more developers to the ecosystem. There have been several reported incidents revolving around the speed, scalability, and accuracy of the network.

Possesses very fewer real-world use cases

Major cryptocurrencies like Bitcoin, Ethereum, and Solana, to name a few have disrupted the global economic and financial ecosystem. For a coin to have legitimacy over the long term, there needs to be real-world utility. But when it comes to Shiba Inu, the coin has not made much headway. Shiba is far behind in the DApps market, like Uniswap, OpenSea, and Axie Infinity, in terms of use cases and implementation.

Still no institutional adoption

Many cryptocurrencies threaten to replace fiat currencies. But there is still no evidence or speculation that Shiba Inu will be facing any institutional adoption in the coming years. For SHIB holders, volatility is still a major issue. Moreover, several market analysts and crypto specialists have suggested investors consider Shiba Inu only for short-term investments, and not choose it as a long-term investment asset.

More Trending Stories