Shiba Inu (CRYPTO: SHIB) has been one of the hottest cryptocurrencies to buy this year. Since the start of 2024, the meme token has more than doubled in value, performing even better than Bitcoin, the world's biggest crypto, which is up about 50%. Cryptocurrencies have benefited from growing optimism after regulators approved the first spot Bitcoin exchange-traded funds (ETFs) earlier this year.
As its value has risen, Shiba Inu's market cap is now more than $15 billion. It's still roughly $4 billion away from the next largest meme coin, Dogecoin (CRYPTO: DOGE), which has a market cap of about $19 billion. Can Shiba Inu catch up?
Could there be an ETF for Shiba Inu?
The risk and upside for meme token investors is that a lot often comes back to momentum, whether it's Dogecoin or Shiba Inu. With meme cryptos, speculation fuels much of the excitement surrounding their valuation. In the past, even a tweet from Tesla Chief Executive Officer and crypto enthusiast Elon Musk has been enough to send a meme token surging. One thing that Shiba investors are excited about now is the possibility of an ETF.
There's been a petition from the Shiba Inu community for Grayscale Investments, the company behind one of the spot Bitcoin ETFs, to launch an ETF for Shiba, which would undoubtedly lead to more interest and potentially more bullishness in the meme coin. But Bitcoin's spot ETF has only recently been approved, and No. 2 crypto Ethereum is still waiting on approval for its own spot ETF, so it could be a while before No. 11 Shiba Inu gets one -- assuming it does at all.
However, it's easy to see the optimism. Money has been flowing rapidly into spot Bitcoin ETFs. Net inflows were about $2.6 billion last week, up 15% from the previous week. Investors have been eagerly buying up spot Bitcoin ETFs, and if Shiba Inu were to get a similar ETF of its own, the meme token's momentum could accelerate even faster.
Can Shiba Inu outrun Dogecoin?
For Shiba Inu to overtake Dogecoin in market cap, it would need to rise by about 25%. Dogecoin has returned almost 50% this year - which roughly matches Bitcoin's return - and it hasn't been outpacing the top cryptocurrency like Shiba Inu has.
This suggests there's added momentum behind Shiba Inu's coin, and if the bullishness in crypto continues this year, Shiba Inu could continue to outperform and rise further in value. Rising higher than Dogecoin certainly wouldn't be out of the question.
Should you invest in Shiba Inu?
Shiba Inu is an incredibly volatile crypto. Even with crypto investments, which are risky to begin with, Shiba Inu stands out as extremely risky and volatile. Within just the first three months of this year, its market cap has seesawed between $5 billion and $22 billion. Although bullish investors will want to believe that this time, Shiba Inu's trajectory is going higher, there is no guarantee this latest rally will prove sustainable.