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

Investors look to put money to work in the cryptocurrency market because of the possibility of scoring huge returns. Perhaps this need for big gains leads them to more speculative tokens.

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

But could investing $100 right now in Shiba Inu one day make you a millionaire?

Shiba Inu’s past

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

But the bubble burst, and Shiba Inu felt the pressure. Despite registering a surge earlier this year, the token now trades 85% off that all-time high from nearly three years ago. Investors have completely soured on the digital asset.

Even though Shiba Inu has taken its owners on a wild ride, it has still put up an all-time return of more than 1,300,000% (as of Sept. 3). This means that had you simply invested approximately $75 in Shiba Inu back in August 2020, you’d be a millionaire today.

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

Shiba Inu’s future

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

You might think that this bodes well for Shiba Inu’s future, as I believe all cryptocurrencies must start to find compelling real-world use cases to boost their long-term viability. However, here’s where Shiba Inu leaves much to be desired.

According to cryptwerk.com, the token is only used as a method of payment at 965 merchants across the world. That’s about one-tenth the number of places that Bitcoin, the world’s oldest and most valuable cryptocurrency, can be used. And it’s a tiny drop in the bucket when compared to Visa, whose cards are accepted at a whopping 130 million merchants.

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

Looking at its past, it’s clear that Shiba Inu, like Dogecoin, follows various hype cycles. A tweet by Tesla founder and CEO Elon Musk can send the token’s price soaring in short order. But even faster than it climbed, it can come crashing back down when the excitement fades.

Consequently, there are really no valid reasons to want to buy and hold Shiba Inu. Therefore, I believe Shiba Inu is a poor place to park one’s hard-earned savings. So, it’s not a surprise that I don’t think there’s a chance that a $100 investment could one day turn into a $1 million thanks to this dog-themed token. Even if you put in more capital up front, the chances are slim.