Should You Buy Shiba Inu While It's Under $0.01?

Shiba Inu (CRYPTO: SHIB) can't seem to catch a bid. The adorable meme coin hasn't joined in the rally that other cryptocurrencies have seen over the past year. Bitcoin has risen 58% over the past year, and XRP is up 365%. Even Dogecoin has gained 32%.

Yet, Shiba Inu has dropped 42%. The token's price is currently $0.000013.

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It creates an interesting proposition for risk-seeking buyers. The cryptocurrency markets have experienced ups and downs, and the friendly stance the Trump Administration has taken toward the crypto space bodes well for investor enthusiasm, which could lift prices across the board.

As you can see, that has already happened for multiple digital tokens. Does Shiba Inu have a big move coming? Here is a look at whether investors should consider buying the meme coin while it's still under $0.01.

The Shiba Inu mascot. Image source: Getty Images.

The trick that small numbers play on the mind

Expanding on the Shiba Inu proposition, it's easy to do the mental gymnastics to paint it in a positive light. One token costs a fraction of a penny. Sometimes, very small or large numbers can lose their significance when they're just numbers on a screen.

But the current $0.000013 price means that it would have to increase 1,000-fold to reach $0.013, or over a penny per token.

That's not 1,000%. That's 1,000 times its current price. In other words, someone who bought a dollar's worth of Shiba Inu would then have $1,000.

The mental trap is that it's easy to think, "Well, if it just goes to a penny, I'll make a ton of money." But as you can see, that's far harder and less likely than it looks on the surface.

Even at the peak of the zero-percent interest rate bubble in 2020-2021, the price reached its all-time high of only $0.00008845. Revisiting that high would mean a nearly sevenfold return from today's price.

An increasingly competitive meme-coin space could spell trouble

So, if investors set their sights on Shiba Inu revisiting its all-time highs, a far more likely goal, how likely is that?

Well, that's where the conversation gets a bit complicated. It's essential to remember that it's a meme coin, generally not intended for numerous real-world applications. Instead, meme coins are best thought of as a cryptocurrency to build a community around.

That doesn't mean that it's useless; quite the contrary. Shiba Inu utilizes the Ethereum blockchain network, which enables it to leverage smart-contract functionality and compatibility with the world's largest blockchain.

However, that hasn't translated into much developer support. Therefore, the crypto relies on popularity to drive demand, which in turn influences its price. However, it continues to face an increasingly crowded field and is currently the 19th-largest cryptocurrency, with a market capitalization of $7.8 billion. Almost anyone can launch a meme coin, which essentially means that there are low barriers to entry for competing for investor attention.

How Shiba Inu could have a place in your portfolio

To completely dismiss Shiba Inu would go against the spirit of meme coins. It's fine to buy it as long as you understand that it's for fun and do so as a tiny component of a diversified portfolio built with more-serious assets.

In other words, this is not something you buy hoping to build a retirement with.

The volatility of cryptocurrencies might even work in your favor, and if Shiba Inu's price spikes and you make money, then great! It's just unlikely to reach $0.01. Setting the proper expectations before investing your hard-earned money will save you a lot of emotional strife and ensure you appreciate meme coins for the fun and community they create.

Should you invest $1,000 in Shiba Inu right now?

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.