Should You Buy Shiba Inu While It's Worth Less Than $0.01?

Shiba Inu (CRYPTO: SHIB) has only traded at fractions of a penny since its launch nearly four years ago. The meme token, which was created as a parody of Dogecoin (CRYPTO: DOGE) , started trading at $0.000000000056, hit an all-time high of $0.000086 in October 2021, but now trades at about $0.000018.

However, that means a $100 investment would have grown to $153.57 million before shrinking back to roughly $30.36 million today. That's an impressive gain, but some bullish investors believe Shiba Inu could still rise more than 58,700% to $0.01.

That view is backed by Lucie, a leading Shiba Inu team member who once told her 143,700 followers on X that she "always believed" it could hit $0.01. So should investors buy Shiba Inu while it's still trading far below that target?

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Shiba Inu's strengths and weaknesses

Shiba Inu was built on the Ethereum blockchain. Its entire supply of nearly 1 quadrillion tokens was pre-mined before launch, but it's already burned ( taken out of circulation ) more than 40% of its tokens to tighten up its supply.

Shiba Inu uses the same power-efficient proof-of-stake ( PoS ) method as Ethereum instead of the energy-intensive proof-of-work ( PoW ) mining method used by Bitcoin and Dogecoin. Like Ethereum and other PoS blockchains, Shiba Inu's network supports smart contracts that can be used to develop decentralized apps ( dApps ), non-fungible tokens ( NFTs ), and other crypto assets.

Therefore, Shiba Inu's value is usually gauged by the growth potential of its ecosystem. That long-term expansion could be driven by its cross-chain decentralized exchange ( DEX ), ShibaDEX, and its Layer-2 blockchain protocol, Shibarium.

However, Shiba Inu has three glaring weaknesses. First, it's still pinned to the Ethereum blockchain and ultimately limited by its speed restrictions. That means it processes its transactions at a much slower rate than Solana (CRYPTO: SOL) , Cardano (CRYPTO: ADA) , and other newer PoS blockchains that are gradually pulling developers away from Ethereum.

Second, a few anonymous whales still hold trillions of Shiba Inu tokens. These big investors could easily move its price with huge and unpredictable trades. Lastly, Shiba Inu is only accepted for payments at a handful of businesses, and it probably won't gain as much momentum as Bitcoin or Ethereum as a mainstream payment option.

Does a price target of $0.01 make mathematical sense?

So for now, Shiba Inu's price seems to be driven by short-term trades and Elon Musk's random tweets about dog-themed coins. Lower interest rates and the approvals of Ethereum's spot exchange-traded funds (ETFs) might drive its price higher this year, but those broader tailwinds might generate bigger gains for other tokens.

Even Lucie warned that "everything takes time" and that Shiba Inu's price wouldn't hit $0.01 "immediately." However, some critics believe it's mathematically impossible to hit that price with its current supply of 589 trillion tokens.

If Shiba Inu actually reaches $0.01, its market cap would nearly hit $5.9 trillion -- compared to a combined market cap of $2.3 trillion for the entire crypto market today. And according to Shiba Inu's own burn tracker, it would need to reduce its supply to about 85 billion to reach $0.01 with a sustainable valuation. Shiba Inu's new burn portal on Shibarium is making it easier to burn tokens at a faster rate, but crypto YouTuber Jeff at OnTheChain.io recently warned it could take more than a million years to reduce Shiba Inu's circulating supply to about 100 billion tokens.

Should you buy Shiba Inu today?

Shiba Inu has been more resilient than other meme coins during the past year, but it hasn't carved out a defensible niche yet. It doesn't process transactions at an impressive rate like Solana, it isn't used for as many mainstream payments as Ethereum, and it isn't considered a stabilizing asset like Bitcoin. Therefore, Shiba Inu will likely remain a speculative and volatile cryptocurrency for the foreseeable future. It might be good for a short-term trade or two if the crypto market warms up again, but I doubt it will experience a historic rally toward the $0.01 threshold in the foreseeable future.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, and Solana. The Motley Fool has a disclosure policy .