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Why Shiba Inu is losing all its popularity?

06 Aug 2022 By : Divya Behl
Southeast Asia’s Lar

Several cryptocurrencies are losing their lustre as a result of the crypto crisis. Shiba Inu (SHIB) is one such case, created as an Ethereum-compatible alternative to Dogecoin (DOGE),  previously in the top ten digital tokens but currently struggling to pass DOGE in market cap.

The dog-based meme coin has declined almost 90%% from its high value of ₹0.0061 in late October 2021. Currently, it is trading around  ₹0.000950. Furthermore, the price has not shown any exponential growth in the last several months.

Related- What Are Meme Coins | Leading Meme Coins: Dogecoin, Shiba Inu

Shiba Inu's overall market capitalization has plummeted to ₹519B. During its peak, it was around ₹3,031B up to five times what it is now. However, because of the token's cheap pricing, trade volumes have remained steady.

Last year, Shiba Inu (SHIB) became a worldwide sensation, and everyone wanted to get on board the hype train. Now, that hype is non-existent, and interest in Shiba has vanished. In this article, we will explain why this happened. But first, let's go through some analysis.

Google searches and social media mentions

As per the google trends, searches for "Shiba Inu" had returned to pre-hype levels in October and November of last year. It's also worth mentioning that "Shiba Inu" refers to a dog breed, after which the cryptocurrency is named. As a result, those interested in the coin itself are likely to be even fewer.

Source: Google Trends

While many may argue that this is due to the overall downturn in the crypto market (and they would be somewhat correct), Bitcoin and Ethereum did not see such a significant drop in retail interest. According to data, searches for "bitcoin" are down approximately 65% from their 12-month peak, while searches for "Ethereum" are down around 60%. These are significant drops, but nowhere like the 95% drop in interest that Shiba Inu suffered from its 12-month peak.

Along with google searches, a drop is observed in social media mentions too. Multiple social indicators show that interest in cryptocurrencies and Shiba is declining.  For example, Twitter sentiment has been declining for quite some time. The same is true for Telegram too, the number of SHIB channel members is decreasing, as is the sentiment:

Why is the interest in Shiba Inu declining?

For once, it had to do with its excessive expansion, which was clearly based on pure speculation. During its peak, stories of SHIB-made billionaires began to circulate. On October 31st, 2021, the cryptocurrency increased 100,000,000% from January of that year. That's right - 100 million percent. This meant that if you had invested even $1 on January 1st, you would have become a billionaire if you had held on to the stack.

This attracted a specific type of investor that doesn't give a damn about what they're investing in. People were rushing to SHIB and SHIB-inspired copycats in droves, and interest was skyrocketing. Other meme coins, like Floki Inu, were also advertised.

However, when the price stops skyrocketing and setting new all-time highs, individuals who were solely in it for the money either sell out and never look back, or hold on to their bags in the hopes of a miracle comeback. 

According to current research, around 72 percent of Shiba Inu owners experienced a loss on their SHIB investments which is significantly greater than those who made profits. Of course, this is anticipated given that the price is down 90% from its all-time high, but it also demonstrates that many individuals were pursuing pumps long after the price had skyrocketed.

The primary explanations for the fall in interest are the losses they sustain and the ongoing bear market. Many people believe that the golden period of Shiba Inu has passed and that there is no point in investing in them. 

Along with that, there are a few drawbacks of investing in Shiba Inu that discourages many investors. These factors are considered while purchasing a Shiba Inu.

Drawbacks of Investing in Shiba Inu

Peak has passed

Shiba Inu was one of the most successful cryptocurrencies in 2021, due to the fact its value increased by multiple thousands. While this was a good thing in that it pushed Shiba Inu to the center of attention, it complicates Shiba Inu as an investment for someone buying now. This is due to the large number of individuals who made purchases in 2020/21. Despite the present collapse, these investors are still making huge gains and have an incentive to sell.

This implies that, even at current levels, Shiba Inu might continue to fall if whales decide to abandon their investments and invest in emerging cryptocurrencies or other assets. It is one of the reasons why, in addition to Shiba Inu, it is a good idea to diversify into other high-potential cryptocurrencies.

Less utility

One of the most serious problems for Shiba Inu is a lack of unique features in comparison to the thousands of other cryptocurrencies on the market. This has resulted in poor acceptance, particularly among enterprises, which would give SHIB appeal outside of the cryptocurrency industry. SHIB is utilized as a payment mechanism by less than 100 firms as of 2022. This limits the value of Shiba Inu, especially when competing with high utility cryptocurrencies like Bitcoin and Ethereum.

Shina Inu is still a speculative investment that does not meet any of the criteria for good fundamentals. Shiba currently has a limited number of use cases, and even as a payment option, it is competing for leftovers. It is uncertain whether SHIB developers will continue to contribute value.

An ERC-20 token

Shiba Inu lacks its own blockchain and is based on the Ethereum blockchain. Shiba's circulating supply is very concentrated, making the meme token a high-risk investment.

Shiba Inu is developed on top of the Ethereum blockchain.  While this offers advantages owing to Ethereum's dominance, it is not without risks. One of them is that if the value of Ethereum falls, so do ERC-20 tokens. As a result, if you are an investor, you should keep a watch on the Ethereum ecosystem as a whole. 

Conclusion

Cryptocurrency like any other trading market, experiences bear and bull runs, that's what happened with Shiba Inu too. Most people who watched others making exponential returns in the Shiba Inu bull run blindly invested in it. After not seeing any exponential increases, a few of them sold SHIB, while others are simply holding it in hope of a miracle.

People lost interest in Shiba Inu due to their unrealistic expectations for its growth. Experts have often warned investors to stay away from Shiba Inu because of its bad fundamentals and fewer use cases.

Shiba, like all other meme currencies, was established solely on marketing hype. Despite this, the team has been attempting to solve the problem by developing additional products for the Shiba Inu ecosystem. 

Since last month, it is showing some signs of revival but it was bearish for a long time. If you are considering investing in Shiba Inu (SHIB), we recommend conducting extensive research. Proceed with care and adequate study when purchasing any coin, token, or other crypto assets. SHIB is still a volatile crypto asset, and moving further requires a thorough grasp of meme currencies, risk analysis, and other indicators.

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