History was to repeat itself less than one month later, with SHIB/USD increasing more than twenty-fold in value from around $0.0000015 to as much as $0.000035 in a matter of days in early May. SHIB/USD then consolidated in the $0.000006-0.000008 area until another explosive move to the upside in October 2021.
SHIB/USD increased ten-fold in value between 1 October, when it was changing hands under $0.000008 and 27 October, when it hit $0.00008. This move really put Shiba Inu on the map, given that at its monthly peak, its market cap briefly surpassed that of rival Dogecoin and surpassed $41 billion.
A significant deterioration in cryptocurrency market sentiment since last November as a result of a worsening global economy (inflation rising and growth weakening) and central banks turning more hawkish has seen SHIB/USD drop over 90% from its October 2021 peaks. The cryptocurrency was last trading around $0.000008 per token and within the $0.000005-0.000010 range that prevailed throughout much of 2021.
What Next for SHIB?
Despite its short history, there is no doubt that Shiba Inu is here to stay given the strength of its community and fan base. Shiba Inu’s official Twitter account has over 3.4 million followers, in joint third place alongside Dogecoin and behind only Binance and Bitcoin. Meanwhile, on crypto social intelligence data website LunarCrush, Shiba Inu consistently ranks in the top ten cryptocurrencies in terms of the website’s social dominance, social engagements and social mentions measures.
Shiba Inu investors will have to be patient, but eventually global macroeconomic and financial conditions should improve (most economists think). Perhaps global central banks will be in a position to start reducing interest rates with inflation coming back under control in 2023/24.
When the macro-outlook for broader cryptocurrency markets starts to improve, Shiba Inu is likely to be a prime candidate for outperformance, given its aforementioned strong brand and notoriety to rival Dogecoin.
The token’s short and volatile history makes identifying long-term technical trends difficult. But if recent history is any lesson, SHIB/USD maintains the potential to increase swiftly by more than ten-fold in a matter of days if conditions are right.
Many long-term HODLers will be patiently waiting for such a move to occur, perhaps as soon as the end of 2022 or in 2023 if the inflation outlook/outlook for central bank policy drastically improves, and for the October 2021 highs to be taken out.
However, a return to October 2021 highs suggests a rebound in SHIB’s market cap to above $40 billion. In the absence of the Shiba Inu token offering its investors real utility, its hard to justify why the token’s market cap should increase much beyond there between now and 2025.
That means that innovation by developers working to expand the Shiba Inu ecosystem in the coming years will be crucially important. Since its launch in July 2021, Shiba Inu’s Decentralised Exchange (DEX)/Decentralised Finance (DeFi) platform ShibaSwap has mostly failed to gain traction.
As of Monday, the Trade Value Locked (TVL) on the platform is under $30 million, well below highs above $650 million last November. Developers will need to up their game in order to attract flows back to the platform when the broader DeFi market recovers in the years ahead. One potentially big near-term positive catalyst for SHIB could be the release of the Shibarium metaverse later this year.
