At a time when benchmark equity indices are posting some ugly losses, the narrative for cryptocurrencies is starting to attract doubt. That is especially the case for Shiba Inu (SHIB-USD). It is a speculative meme coin in the best of circumstances, but looks downright dangerous to wager on right now.
Still, the crypto sector is full of surprises. Over the trailing year-plus, the resilience of digital assets has been downright impressive. Multiple times, circumstances boded poorly for blockchain-derived currencies and tokens, only for the market to bounce higher. Could the same occur again for Shiba Inu?
The new normal of the broader capital markets has proven that you should never say never.
A Risky but Positive Case for Shiba Inu
While it is not wise to speak in absolutes regarding cryptos, you must abide by one core criticism: due diligence. With virtual currencies liable to go anywhere and at any time, you want to make sure you asses the pros and cons before moving forward. And even then, you’ll want to exercise strict money management.
Caveats aside, though, the bullish case for Shiba Inu isn’t entirely unreasonable. Off the top of my head, I can think of three reasons why SHIB could swing higher:
- It is under the radar
- It has slowly rising momentum
- It has strong community support
The first catalyst is self-explanatory. Due to the Russian invasion of Ukraine, several blue-chips stocks are under the microscope. Yes, U.S.-backed sanctions are hurting Russia. According to a live report by the Wall Street Journal, “Russia’s currency sank to a record low Monday [March 7, 2022] as traders struggled to get access to the ruble.”
However, both the sanctions and the Russian response will and have already hurt American and western interests. Notably, gasoline prices have soared, suggesting pain to come for exposed blue-chips. But Shiba Inu? It is flying underneath the flak.
As for the second factor, SHIB actually does enjoy rising momentum, though its hefty losses over the last three months don’t reflect that. Instead, you must consider that since Jan. 22 of this year, Shiba Inu has generally been charting a series of higher lows.
Is that enough to justify jumping into the pup coin? Perhaps not, but combined with being under the radar, it might help.
Finally, Shiba Inu commands a loyal army of followers. In a circumstance where investors globally are weak-kneed, SHIB might surprise some folks due to its rabid support.
The Walls Are Closing In
Though Shiba Inu is an intriguing prospect because it is such an unconventional investment, it is not a reliable wager in the face of so many severe problems. After following the crisis in Ukraine, I believe it is possible that western intervention is coming.
Again, let me be clear that this is my speculation. But the reason I fear escalation is that Ukraine might not be an insignificant country from the point of view of U.S. national security. If the implications of a recent New York Times article by Hiroko Tabuchi are correct, Ukraine could be extremely important.
“Ukrainian researchers have speculated that the country’s eastern region holds close to 500,000 tons of lithium oxide, a source of lithium, which is critical to the production of the batteries that power electric vehicles. That preliminary assessment, if it holds, would make Ukraine’s lithium reserves one of the largest in the world.”
This is one of those mainstream news reports that — again, if the implications hold true — present the geopolitical flashpoint in an entirely new context. Essentially, Russia is attempting to control the past, present and future of transportation.
With so much at stake, it seems doubtful that the conflict will resolve quickly. In that case, we can look forward to greater destabilization across the world — if only economically — which wouldn’t be supportive of Shiba Inu.
Let’s not forget that in order to participate in SHIB, people have to give up something of value, whether hard fiat currency or energy expenditure, which, of course, has gotten more expensive lately.
Be Careful Out There
Ultimately, I’m only here to provide my thoughts on the matter.
Shiba Inu does have some positives, as I mentioned earlier. And it’s low-flying nature certainly is an advantage during this crisis. But how much of an advantage that is compared to the terrible things that are occurring in Ukraine and throughout the world is an open debate.
My money is that circumstances don’t look great, which is why I’m staying on the sidelines with this pup coin.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.