Shiba Inu Price Prediction: All Bark, No Bite? (2024)

The story of Shiba Inu, as explained by Market Analyst at Conotoxia, Grzegorz Drozdz, is a classic example of the unpredictable and volatile nature of meme coins in the digital asset market.

Shiba Inu (SHIB) was born into the meme coin category in August 2020 by an anonymous creator known only as ‘Ryoshi’. It’s part of the dog-themed cryptocurrency family, an interesting sub-section of the crypto market that includes Dogecoin (DOGE) and Baby Dogecoin (BabyDoge). Despite their meme origins, they’ve garnered serious attention from investors.

“The cryptocurrency quickly gained popularity mainly due to the support of celebrities such as Tesla founder Elon Musk. Its success has led to the creation of many copies, but Shiba Inu remains the most recognisable of these cryptocurrencies,” Drozdz points out.

The price history of Shiba Inu is a testament to its roller-coaster journey. Musk’s endorsem*nt brought it into the limelight, driving its price up by a staggering 4,000% in just three months, reaching a peak of $US0.000035. However, the high didn’t last long. The meme coin plunged, wiping off 90% of its value.

“Following the initial hype, there was a second, even larger rally six months later. This was prompted by Musk’s announcement that Tesla electric cars could be bought with Dogecoin, leading to Shiba Inu’s price rallying to $US0.000075, a 1200% increase,” Drozdz says.

However, the subsequent bear market of 2022 saw a steep drop in value, with the coin losing around 90% of its peak value.

Last year was a quietly positive one for crypto assets. Many performed extremely well throughout 2023 and began the new year with vigour. The driving force behind this renewed life in the crypto market is largely due to the approval of 11 spot Bitcoin exchange-traded funds (ETFs) in the US, which has been viewed as a step towards legitimising crypto as an investment.

As of May 2024, the price of a Shiba Inu is $US0.00002419, still down over 70% from its all-time high in 2021 but up almost 300% since the beginning of the year.

This volatile past illustrates the highs and lows of meme cryptocurrencies and provides a backdrop for predicting future prices. What’s clear is that Shiba Inu’s price history has been heavily influenced by external factors, including social media sentiment and celebrity endorsem*nt, a factor that cannot be overlooked when making future price predictions.

As Drodz notes, forecasting the performance of cryptocurrencies, especially Shiba Inu, is challenging.However, certain elements could influence its trajectory.

Musk’s endorsem*nt brought it into the limelight, driving its price up by a staggering 4000% in just three months, reaching a peak of $US0.000035. However, the high didn’t last long. The meme coin plunged, wiping off 90% of its value.

However, a rising tide will often lift all ships and a broader bull market for cryptocurrencies could drive up the price of Shiba Inu. As more investors and institutions recognise the potential of digital currencies, it creates a favourable environment for all cryptocurrencies, not just Shiba Inu.

The recent excitement induced by the approval of the 11 spot Bitcoin ETFs is a prime example of this, with the price of Shiba almost tripling in the past few months.

The second crucial aspect, according to Drozdz, is the popularity of meme coins. These coins often experience sudden surges in interest due to social media trends and celebrity influence. However, the duration and stability of this popularity are tough to ascertain. “It is difficult to predict how long this popularity will last,” Drozdz says.

The crypto markets have recently experienced a meme coin frenzy, with a number of meme coins shooting upwards in value and a whole bunch more being created out of thin air. While meme coins can be exciting, it is important to remember that they are purely speculative and are not designed with utility in mind.

Another important variable to remember is unforeseeable occurrences, like Elon Musk’s tweets, which have a history of inducing price volatility in the cryptocurrency market. Drozdz, therefore, cautions that investing in Shiba Inu involves considerable risk. He adds: “Predicting its price is particularly difficult compared to, for example, bitcoin.”

While bitcoin has more data points and a longer history to help inform predictions, Shiba Inu’s relative newness and the highly volatile environment in which it operates make its future performance harder to forecast.

The Bull Case

When it comes to reasons to be optimistic about Shiba Inu’s future, Drozdz points towards its trending nature and the overall positive market sentiment.

“The main factor that meme coin investors are watching is its popularity on social media, which, according to Google Trends data, is still 98% below its past peaks despite a temporary increase recently,” he explains. “Elon Musk’s tweets have been particularly key in the past.”

The relationship between social media trends and meme cryptocurrencies can’t be overstated, and Shiba Inu has demonstrated this correlation in its past performance. As long as it continues to enjoy celebrity endorsem*nts and remains a topic of discussion, there’s potential for price surges.

“Another factor potentially contributing to Shiba Inu’s price increase is the recent setting of all-time highs by bitcoin, the largest cryptocurrency,” Drozdz adds. Bitcoin’s performance often sets the tone for the rest of the crypto market: if bitcoin continues on an upward trajectory, it may very well pull other coins, including Shiba Inu, along with it.

Adding to the bull case for Shiba Inu is the “Shibarium” project, which is a layer-2 (L2) blockchain network built on Ethereum intended to transform Shiba Inu from a simple meme coin into a comprehensive ecosystem. Shibarium was first proposed in May 2021 by Shiba’s anonymous creator in a now-deleted post and is now live for users wishing to transact on the network.

While Shiba Inu, like other meme coins, is characterised by high volatility and a huge total supply of 1 quadrillion coins, the introduction of Shibarium has marked a shift in the structure of Shiba, changing it from a mere memecoin to a token tied to a crypto ecosystem. Although there was an initial hiccup that momentarily left millions of dollars stranded due to a technical glitch, the Shibarium project holds the potential to redefine Shiba Inu’s position in the cryptocurrency market.

The Bear Case

While popularity can work in Shiba Inu’s favour, it could also be its undoing. According to Drozdz: “Shiba Inu’s biggest disadvantage seems to be at the same time its biggest advantage—fashion and popularity.”

The meme coin market is constantly evolving, with new coins being created almost daily. “There have been many similar designs since Shiba Inu was created, which in turn reduces the potential for Shiba Inu to become another seasonal favourite,” Drozdz says.

Meme coin, Pepecoin, for example, made headlines in the crypto world recently, when it shot up from a market capitalisation of under $US1 million to way over $US6 billion recently. While some lucky investors made some crazy gains, many more lost substantial sums of money if they couldn’t handle the stomach-churning drops in between.

The competition from these newcomers could potentially dilute Shiba Inu’s market share. As a result, the whims of the meme coin market and the constant competition from newer coins could push Shiba Inu into the shadows. Ultimately, it’s a double-edged sword, with its popularity and trending status both powering its growth and posing a potential threat to its future value.

Assessing the viability of a cryptocurrency investment can be challenging due to its inherent volatility and unpredictable nature. When it comes to Shiba Inu, Drozdz emphasises considerable caution.

“Given the factors outlined that can affect the cryptocurrency’s price and its characteristics, it is important to emphasise that it is not a good investment for the vast majority of investors,” he says. This caution stems from the fact that Shiba Inu has demonstrated considerable price fluctuations in the past, with its value falling by more than 90% on several occasions.

Despite favourable circ*mstances in the broader crypto market, such as bitcoin’s price surge, investing in Shiba Inu may not be a wise choice for everyone. Drozdz adds: “Despite a positive environment, such as increases in the price of Bitcoin, investing in Shiba Inu does not appear to be a good option at the moment.”

While Shiba Inu has had its moments in the limelight and may continue to have such moments in the future, the coin’s volatility makes it a risky venture. It’s a play that might suit those with a high risk tolerance and an appetite for the unpredictable nature of the memecoin market, but for the average investor, the instability and unpredictability might outweigh the potential for high returns.

As always, anyone considering investing in cryptocurrencies should do their own research, understand their risk tolerance, and consider seeking advice from a financial advisor.

This article is not an endorsem*nt of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.