Like all cryptocurrencies, Shiba Inu (CCC:SHIB-USD) has not been immune to the recent market sell-off. The easy and lazy take would be for crypto skeptics to use the current volatility as an opportunity to say “I told you so.” That’s a conversation I know better than to have. In fact, the recent sell-off in Shiba Inu may be just what the altcoin needs to prove that it has staying power.
One of my primary concerns about cryptocurrency in general, and an altcoin like SHIB in particular, is that investors have never experienced what these coins would do in a bear market. The conventional narrative was that crypto would move counter to the market. But that hasn’t been the case. In fact, like all risk-on assets, cryptocurrencies have been getting whacked even more than some tech stocks.
However, for Shiba Inu investors the recent sell-off is the continuation of a pattern that began at the end of October 2020. That was the last time SHIB posted a large price spike. Since then, the coin has been in a bearish pattern of lower highs and lower lows.
Glancing around message boards shows me that there is about a 50/50 split between the bulls and bears. So what should Shiba Inu investors do now?
Manage Expectations Don’t Move Goalposts
If you bought Shiba Inu, I expect that you had a game plan complete with buy and sell triggers. The temptation when an investment you believe in goes into a tailspin is to move your goalposts. You think you can let it drop a little further. You believe you can give it one more day, etc.
But most of the time it simply doesn’t profit investors to fight the tape. If Shiba inu is what you believe it is, you can still sell a little now and live to fight another day.
Prior to this recent sell-off, the SHIB army may have been willing to brush off the altcoin’s drop as profit taking and tax harvesting. After all, even the most loyal soldiers want to enjoy their spoils every now and then.
However, the recent sell-off is calling that optimistic narrative into question and bringing up reminders that Shiba Inu lacks the utility of some other altcoins. And the real problem for some holders of the altcoin was, unless they got on the Shiba Inu train early, they’re sitting on a fat loss at the moment.
Here’s Why Clarity Matters
About a month ago, I wrote about the Shibariums. It’s a level 2 blockchain that will be proprietary to Shiba Inu. The benefits of this blockchain include increased transaction speed, an eco-friendly proof-of-work (PoW) system for authentication, self-management storage per size in the blockchain and full governance. Furthermore, Shibarium will have a native stable coin, SHI, to help provide a solution to the high fees that SHIB incurs as an ERC-20 token.
Shibarium is supposed to launch sometime in 2022. However, as I mentioned in my prior article, developers are playing the release date close to the vest. As in, they haven’t put a date or even a quarter out there for investors to point to. On the one hand, I could say that it’s better to under promise and overdeliver. But there’s a point where that just begins to sound like spin.
As I said then, I have no reason to believe that Shibarium won’t launch. The SHIB community certainly believes that. I’m just saying that now would be a great time for an announcement.
Shiba Inu Remains a Gamble with an Uncertain Future
Right now, Shiba Inu is considered a risk-on asset at a time when the markets are moving to risk-off assets. That’s not my opinion; it’s just what’s happening. And it just shows that, at this time, altcoins are not considered a mainstream investment.
Should that matter to you? It would to me, but with millions being wagered on sports betting every day, I suppose that cryptos could be seen as just another wager. However, we may look back on this period as a time when the cryptocurrency bubble burst. Or we could look at it as a time when it proved why investors are so enamored with it to begin with.
There’s a range of outcomes that could happen. That’s not a bet I’d want to take. If you do, I urge you to look at the size of your position in Shiba Inu and if you have profits to take, there’s nothing wrong with cashing out.
On the date of publication, Chris Markoch 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.
Chris Markoch is a freelance financial copywriter who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.