Investing in memecoins is perhaps the most risky form of cryptocurrency investment that can be undertaken. These tokens have little-to-no fundamental value and are reliant almost entirely on speculation and hype to drive their growth. That said, on occasion, these tokens can produce outsized returns in shockingly small periods of time. 

Shiba Inu ($SHIB) was amongst a small handful of memecoins to reach unprecedented heights during the 2021 bull market - another example of which is the well-known Dogecoin ($DOGE) as often mentioned by Elon Musk.

In October 2021, SHIB reached a market capitalization of more than $41 billion which, in today’s market, would make it the fourth largest cryptocurrency. At that point, the price of a single SHIB token stood at approximately $0.000075, according to data from CoinMarketCap. 

Since then, however, and in the wake of a merciless cryptocurrency bear market, SHIB’s price has fallen some 87% in value.

So, bearing in mind that returns in cryptocurrency are never guaranteed and especially so when it comes to memecoins, let’s take a look at what a $100 investment in Shiba Inu’s SHIB token, today, would yield at certain price levels…

$100 if SHIB Returns to All Time Highs…

Shiba Inu’s all-time high price and market capitalization manifested on October 30, 2021. The rise and fall of the token was rapid, and lasted just a handful of weeks. One month prior, SHIB’s price was less than 10% of what was seen on October 30, and just a month later, at the end of October, SHIB had sunk back to less than 50% of its ATH price.

Whether or not SHIB will return to the ~$0.000075 price mark in the coming months and years is anyone’s guess. However, if it did, the returns would be impressive.

A $100 investment made at today’s price, of around $0.000001, would nonetheless yield a more than 75x return. For further context, that $100, would have climbed to be worth around $7,500. Similarly, therefore, if the initial stake was increased to $1,000, the value on all-time highs would be close to $75,000.

$100 if SHIB Reaches $0.0001…

In an even more outlandish scenario, wherein SHIB exceeded its all-time high prices by a further 33%, to reach a token value of $0.0001, a $100 investment today, would be valued at approximately $10,000, equating to a 100x return.

A Pinch of Salt…

It is worth noting, however, that, with a current total supply of around 590 trillion SHIB, a 100x return from today would require a market capitalization for Shiba Inu of around $580 billion, in light of its current market cap of around the $5.8 billion mark, according to CoinMarketCap, assuming supply remained constant.

For context, this would make SHIB the largest cryptocurrency in the market, on today’s value, eclipsing even BTC with its current market cap of just $575 billion. When viewed in this light, the prospect of seeing outlandish returns from memecoins like SHIB seems all the more unfeasible.

This hurdle is compounded by the fact that, being a memecoin, SHIB has little-to-no real value aside from an apparent ability to benefit from speculative market fervor. Suffice to say, an unprecedented resurgence of the wider cryptocurrency market would be required for such a return to occur.

Takeaway

In conclusion, though it is clear to see that appealing returns would indeed be made if memecoins, like SHIB, were to return to levels seen in 2021’s bull market, the harsh reality is that such performance is entirely unlikely in the immediate future. 

This is true for all speculative cryptocurrency tokens but is perhaps most true for assets like SHIB and DOGE. The sub-$0.01 prices exhibited by these coins can often be misleading, with investors seeing the reaching of, for instance, $1 being a reasonable prospect. However, when assessed alongside figures such as the supply of those tokens, and their current market cap, the unlikely nature of the aforementioned gains becomes clear.

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Disclaimer: Nothing in this article is intended to constitute financial advice. The content of this article is intended for entertainment and educational purposes only. Investing in cryptocurrency carries a high degree of risk. Capital is at risk and returns are never guaranteed. You should always do your own research.