Despite the fact that Shiba Inu (SHIB -1.56%)’s price is currently 89% below its all-time high, some risk-seeking investors are still interested in the cryptocurrency. The dog-themed digital token has seen an impressive 82,000-fold increase in the last three years. However, I don’t believe Shiba Inu makes for a wise long-term investment due to several reasons that I’ll explain below. Instead, investors should consider Bitcoin (BTC -1.44%). This crypto is ready for a significant run, even more so than the one it’s on now.
A critical look at Shiba Inu reveals a lack of competitive edge. It was created on the Ethereum network to increase functionality and adoption, but this has not been successful. According to cryptwerk, Shiba Inu is accepted at only 792 merchants worldwide. The introduction of the Layer-2 solution, Shibarium, may lower transaction fees and increase throughput. Nonetheless, developers and users may still prefer Ethereum, which has a longer history and a more established developer network, making it a popular choice for decentralized apps. The current market cap of the cryptocurrency industry has doubled this year, yet the price of Shiba Inu has risen by only 16%. This shows that investors may be losing interest and the hype is fading.
Bitcoin has certain characteristics that make it very attractive. Its price has increased by 60% in three months and it is now valued at almost $41,000. The momentum behind it is strong. Investors should buy Bitcoin now because there are some catalysts that may cause another significant run. In April 2024, the rate of new Bitcoin mined will be halved. This reduces supply production and, with increasing demand, could push up the price. This has been the case in the past and the few months before and after the halving have seen a major rise in Bitcoin’s price. Additionally, there may be Bitcoin spot exchange-traded funds. Many big asset managers, overseeing trillions of dollars, are trying to introduce these products and could bring lots of institutional capital to Bitcoin.
The limited supply of Bitcoin is very compelling; there will only ever be 21 million coins in circulation. Furthermore, it is easier to use for transactions, transport and divide than gold. The volatility may be a concern for some, but Bitcoin has done a great job of increasing its owners’ purchasing power. As such, investors should ignore Shiba Inu and focus on Bitcoin.