What Is Shiba Inu Coin? Should You Invest?

Shiba Inu coin (SHIB) is a new spin-off cryptocurrency ambitiously aiming to be the Ethereum-based version of Dogecoin and promotes an incubator environment for digital currency. 

There are roughly 400 trillion SHIB coins currently in circulation whereas there are about 2.2 trillion US dollars (as of September 2021) in circulation as a relative comparison. Although it is said that half the total coins were burned to a dead wallet in order to increase the chances of survival for the coin. This may certainly be considered a frivolous attempt at creating scarcity and hence why you still see many zeros in front of the valuation today.  

The coins were sent to Ethereum creator Vitalik Buterin, but this loose involvement / marketing ploy was used to paint Vitalik as a direct investor, misleading would be investors. Vitalik eventually donated the coins to an Indian relief fund. 

When tied to the production of goods and services, an extreme excess of any currency will drive the price down due to supply and demand. 

SHIB coin does not aim to be scarce by any means. In fact, the max supply of the coin is actually capped at one quadrillion, a number you'll never need to use practically in any sense because it is equivalent to 1,000 trillion. These numbers are only ever used in cosmic language, stars, and talking about the universe to put it in perspective. If you had 1,000 trillion of anything laying around, is it really worth anything? 

Imagine bringing grains of sand to the farmer's market or your local Best Buy and hoping to make a fair exchange. You are essentially doing just that with a hopeful purchase of SHIB coins. 

One of your most important considerations with a new investment is capital preservation. The permanent loss of capital in a low interest, high inflationary, and speculative environment does create much greater risk for new investors.

The greatest risk to a new investor is that they never invest again.

Taking a painful irreversible loss on an investment that prevents them making future investments is a common reality. The fear of loss creates a perception that all assets are high risk. 

Is SHIB coin safe?

A red flag that could lead to the permanent loss of your money is that a developer at some point had permissions to simply withdraw user tokens on ShibaSwap and deposit them to different addresses. There has not been enough history to have regular, transparent audits on operations, and whether insiders will follow the non-compliances of an audit is still subject to review. 

Does a listing on a large exchange like Coinbase help vouch for a coin like SHIB? 

Coinbase's revenue mainly comes from brokering transactions between the buyers and sellers of cryptocurrency. They are not in the business of auditing, fraud prevention, and ensuring the integrity of white papers and their associated founders. Trending coins provide an attractive influx of transactions to brokers that take a percentage of every transaction that takes place. 

SHIB coin received a healthy surge up 35% after Coinbase's initial listing of the currency. 

With the extreme dilution that SHIB coin faces, there is no strong reason to make it an investment. Founders are looking to ride the meme tidal wave and lure in new investors with the promise of wealth and innovation. 

If you're willing to accept a small amount of speculation, make it a reasonable portion of your portfolio (<5%) that you are willing to lose without major consequence. 

You can purchase SHIB coin on ShibaSwap, Uniswap, and Coinbase.