2 Reasons to Sell Shiba Inu Now

Shiba Inu (CRYPTO: gray hair) Spread last year, it grabbed the attention of the financial world by creating a massive fortune in a very short period of time. In fact, since it reached its lowest level in November 2020, its price has increased by 47,500,000%, and it is currently ranked 14th in terms of cryptocurrency value. Even more impressively, that number represents a lengthy sale that began in October 2021, wiping out 69% of its value.

Dazzled by these numbers, many investors hope to emerge in 2022. But this kind of thinking is dangerous. Past returns are never a guarantee of future performance, and although Shiba Inu has fallen off a lot from its peak, things could only get worse. With that in mind, here are two reasons to consider selling this cryptocurrency.

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1. The Shiba Inu lacks a competitive advantage

Shiba Inu is an ERC-20 token, a currency generated by a smart contract on Ethereum blockchain. In other words, Shiba Inu does not have its own blockchain, which means that it cannot support its own ecosystem of decentralized applications (dApps) and decentralized finance (DeFi) products. However, a lot of ERC-20 tokens have become important players in the crypto economy, in particular chain link And pregnancy.

On the bright side, all ERC-20 tokens are compatible with the Ethereum ecosystem of dApps and DeFi services. This means that Shiba Inu can be integrated into popular lending protocols with interest such as avi and decentralized exchanges such as Uniswap, as well as applications in other DeFi classes, including options protocols and insurance markets. However, these mergers have so far failed, and I doubt they will ever succeed – simply because Shiba Inu lacks a competitive advantage.

The value of the token is entirely due to the cool brand (i.e. it takes its name from Dogecoinmascot) and relentless marketing campaigns on social media that urge investors to buy and hold. These qualities together led to the meteoric rise of Shiba Inu in 2021, but apart from its popularity, there is nothing special about this cryptocurrency. Unless that changes, its price is almost certain to continue declining over time.

2. The Shiba Inu property is highly concentrated

According to CoinMarketCap.com, Shiba Inu is currently owned by more than 1.1 million crypto addresses, but the top 100 addresses account for 81% of all tokens. This is an incredible amount of wealth concentrated in the hands of very few people. But the problem is actually getting worse.

The top 10 addresses control approximately 65% โ€‹โ€‹of all tokens in circulation. At the time of writing, Shiba Inu’s market capitalization is $14.7 billion, which means that the top 10 accounts are worth $9.6 billion. If only a few token holders decide to cash in – an event that seems increasingly likely as the price continues to fall – the value of Shiba Inu could collapse.

Simply put, the token lacks utility and is too concentrated in too few accounts, both of which create huge risks for investors. That is why you should consider selling this cryptocurrency. After all, there are thousands of other crypto assets out there, and many of them have much greater potential.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis โ€” even if it’s our own โ€” helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.