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What Is a Shiba Inu Coin?
Shiba Inu (SHIB-USD) is an Ethereum-based alternative cryptocurrency, or “alt coin,” created in August 2020 by an anonymous person or entity called Ryoshi. Taking its name from the Japanese dog breed, Shiba Inu, the developer of SHIB describes the digital currency as a “decentralized meme coin” and is widely considered to be an alternative to Dogecoin (DOGE-USD).
Shiba Inu has evolved as an ecosystem that consists of three tokens, with the Shiba Inu coin being its main currency, which began its total supply at 1 quadrillion. However, Ethereum co-founder Vitalik Buterin burned 410 trillion coins (meaning he deliberately sent them to a digital wallet from which they can’t be retrieved). As a result, the total supply is now 590 trillion.
Leash (LEASH) is the second currency in the Shiba Inu ecosystem, while Bone (BONE) is its governance token.
Important: Cryptocurrency, or “crypto,” is a digital currency that shares the same general purpose as physical currency, which is to act as a medium of exchange. Although people can use cryptocurrency to pay for goods and services, the digital currency is more commonly known as a speculative type of investment asset. Because of the speculative nature of crypto, investors should use caution when considering the purchase of Shiba Inu and other forms of digital currency.
How To Buy Shiba Inu Coin
Important Note: This report is not a recommendation to purchase Shiba Inu or any of the various forms of digital currency. For investors who are interested in pursuing a potential investment in Shiba Inu coin, the following steps may be helpful.
1. Evaluate Cryptocurrency Options
Shiba Inu is one of thousands of cryptocurrencies that are publicly traded today, as others continue to come on the market. Examples of popular, more widely traded cryptocurrencies include Bitcoin (BTC-USD), or altcoin options, such as Ethereum (ETH-USD), Litecoin (LTC-USD), and Solana (SOL-USD).
Crypto ETFs that offer indirect exposure to cryptocurrency are also available on the market, such as ProShares Bitcoin Strategy ETF (BITO), which is the first exchange-traded fund to track the price of Bitcoin.
2. Learn How Shiba Inu Coin Is Managed
Shiba Inu coin is a cryptocurrency of the Ethereum network, which uses decentralized applications, or “dapps,” to create contracts that automatically enforce their clauses. In contrast, some of the more popular forms of cryptocurrency, such as Bitcoin, use mining to generate new units and are built on their own blockchain.
Like Bitcoin, some digital currencies have a limited supply of coins, which can create demand and support their perceived value. For example, Bitcoin supply is capped at 21 million. Shiba Inu coin has a total supply of 590 trillion.
3. Understand The Shiba Inu “Fundamentals”
Fundamental analysis for Shiba Inu coin and other cryptocurrencies is not exactly the same as the traditional approach of measuring the intrinsic value of a business. However, investors can analyze certain crypto valuation metrics, such as market cap, trading volume, hash rate, number of active addresses, and transaction value and fees.
Some common crypto valuation metrics include:
- Market capitalization: Also known as network value, the crypto market cap is calculated by multiplying the total number of coins that have been mined by the current price of a cryptocurrency coin.
- Trading volume: Crypto trading volume is a measure of the number of coins that have been exchanged during a given trading day.
- Hash rate: Used on Proof of Work (POW) cryptos like Bitcoin and Ethereum, the hash rate is a measure of efficiency in mining coins and processing transactions. Thus, a crypto’s hash rate can be used in assessing the strength of a blockchain network.
- Active addresses: This metric measures the blockchain addresses that are active in a given period of time. A simple method to calculate active addresses for a cryptocurrency is to total the number of sending and receiving addresses over various periods, such as days, weeks, or months, and analyze the activity to assess the interest in a given cryptocurrency.
- Transaction fees: Miners get financially rewarded for the large amount of computing power and energy required to support a cryptocurrency network. The cost to mine cryptocurrency tends to increase over time; therefore, it follows that fees would need to rise to compensate miners and that analyzing fees paid over various periods can help investors assess the security or stability of a given cryptocurrency.
Important: Investors should note that multiple crypto valuation metrics should be considered together and not in isolation. For example, crypto market cap, without a broader value proposition, may not be useful in assessing the intrinsic value of a cryptocurrency. But market cap coupled with trading volume can be more useful. It’s also important to compare metrics of one cryptocurrency with its competitors.
4. Select an Exchange or Broker & Register
Investors wanting to invest in Shiba Inu coin can begin with the selection of a cryptocurrency exchange, such as Coinbase (NASDAQ:COIN), or a brokerage firm that allows cryptocurrency trading. When selecting an exchange or broker, investors will need to consider the associated crypto trading fees, which vary but can range from 0.1% to 1% or more per trade.
5. Buy Shiba Inu Coin
Shiba Inu coin and some of the major cryptocurrencies, such as Bitcoin, are available for purchase with U.S. dollars, while others require that investors pay with another cryptocurrency. When investors buy coins from cryptocurrency exchanges or brokers, it’s typically stored in a custodial wallet.
Within the Shiba Inu ecosystem, Shiba Inu coin can be purchased and sold through their proprietary platform, called ShibaSwap.
6. Store Your Shiba Inu Investment
Investors generally need an online app, or wallet, to buy and store cryptocurrencies like SHIB. Many crypto exchanges and brokers offer wallet services to their users. Investors wanting to store cryptocurrency themselves can transfer it to their own hot wallet or cold wallet. The primary difference between hot and cold wallets is that hot wallets are connected to the internet and cold wallets are not.
Shiba Inu Coin on Seeking Alpha
Investors can begin their own research and analysis on Shiba Inu coin on Seeking Alpha by first visiting its ticker page (SHIB-USD).
Seeking Alpha Quote Page
For example, on the Summary page, investors can see SHIB’s current price, performance charting, supply, market cap, and trading volume, as well recent analysis and relevant news.
Bottom Line
Shiba Inu is an Ethereum-based cryptocurrency created in August 2020. Investors should keep in mind that, like other cryptocurrencies, SHIB is a risky, speculative investment. As a meme coin, Shiba Inu has limited utility as a real currency and its social media-fueled value can see extreme short-term volatility.
