There are many reasons why Shiba Inu (SHIB) is one of the most loved cryptocurrencies by new traders. While hype plays a major role in boosting Shiba Inu’s adoption, another major reason is that the cryptocurrency is quite cheap. It is currently the cheapest coin in the top 10 list.
For instance, look at the prices of Bitcoin at over $60K. It is possible that you can buy $10 worth of Bitcoin because many exchange platforms provide this, but this will give you a tiny fraction of Bitcoin.
Now take the same amount and place it in Shiba Inu (SHIB). Going by the current prices, you will get around 150,000 Shiba Inu coins. While Bitcoin has immense value in use cases and more adoption, some traders prefer cheaper coins, especially those trading with small accounts.
The Reason Why Shiba Inu (SHIB) is So Cheap
1. Massive Supply
The top of the list of reasons why Shiba Inu (SHIB) is one of the cheapest coins in the market is the coin’s massive supply. The cryptocurrency space works almost the same way as the traditional market (minus the technological aspect). In the traditional sector, the prices of stocks, for example, are influenced by demand and supply, which is the case with crypto.
For example, look at Bitcoin. The supply is capped at 21 million tokens, and most of these have already been mined and are in supply. Compare this number of tokens and the 36 million Bitcoin wallet addresses. This shows that the supply is relatively lower than the demand.
Bitcoin has rallied to the highs of $67K because of this growing demand. Some analysts have even speculated these prices to reach $100K soon because its adoption is still growing. Now back to Shiba Inu with one quadrillion tokens in supply. There are roughly 830,000 Shiba Inu wallet addresses showing that there is insufficient demand to match the humongous supply.
However, some analysts have argued that Shiba Inu’s supply is lower than is speculated, given that earlier this year, Vitalik Buterin, Ethereum’s co-founder, burned 50% of the SHIB tokens that were sent to him. This was trillions of Shiba Inu tokens taken out of supply. Shiba Inu developers sent him half of SHIB’s supply, where he sent 90% of it to a dead wallet address and donated the remaining 10% to an Indian organization to help battle Covid.
2. Investors Steer Clear of New Tokens
One of the things that the crypto sector is famed for is rug pulls, mostly caused by new tokens. Therefore, investors who have been in the market long enough prefer to put their money in projects that have been around for a while, such as Bitcoin and Ethereum.
Shiba Inu (SHIB) launched last year. However, it received a lot of adoption and fame due to its predecessor, Dogecoin. Shiba Inu is one of the many clones of Dogecoin, making it less appealing to both retail and professional investors.
As aforementioned, there are roughly 830,000 Shiba Inu wallets, and most of these have invested a tiny amount in the token. This shows that out of the millions of crypto investors, only a few of them are willing to put their money in the token.
3. Shiba Inu Is Still New
Almost everyone in the crypto market knows about Shiba Inu (SHIB). However, very few people know that this token is just over one year old. Shiba Inu was launched in 2020, and at the time, very few people knew about it. In fact, dog tokens, better known as meme coins, were not as popular as they are now.
However, Shiba Inu has grown in such a short while to become one of the most notable coins in the cryptocurrency space. However, the only gains it has made during this time are in matters recognition as it is yet to find a solid footing in the market.
When a coin is new in the crypto space, many investors are afraid to invest in it because they are unsure what the prices will be in the future. In fact, investors do not really know whether a new coin will actually have any value in the future if it has not stayed in the market for very long.
One of the many issues that come with a new coin in the crypto space is that they do not have actual use cases. Shiba Inu launched the ShibaSwap platform that allows SHIB holders to stake their coins to earn interest. While the ShibaSwap platform has seen immense gains and adoption since it was launched, it does not come anywhere close to the use cases enjoyed by Bitcoin and Ethereum.
Therefore, there is never enough demand in the market to pull Shiba Inu (SHIB) to highs of around $0.01 or $0.1. However, nothing is certain in the crypto space because even the newest tokens can make explosive gains in only a short while.
The other factor that prevents investors from investing in Shiba Inu is because it lacks the kind of regulatory clarity that comes with other coins such as Bitcoin and Ethereum. Investors are not sure that if they invest in these tokens, they will get the same protection that comes with investing in Bitcoin or Ethereum.
Bottom Line
Shiba Inu (SHIB) has made over 100,000,000% gains over the past year. While these gains are phenomenal, it is still among the cheapest cryptocurrencies in the market. Its low prices are mainly caused by the massive supply of the token and the fact that it has only been in the market for a short while.
However, there is no telling whether this price will change in the future. The crypto market is constantly evolving, and this means that a coin that is not valuable now could be worth a lot in a few years. Given the gains made by Shiba Inu in just a short time, it is definitely a coin to watch out for.
