World's largest cryptocurrency is Bitcoin (BTC). As of this writing, its market capitalization is $1.3 trillion, making up half of the crypto market ($2.4 trillion). It reached a new high of $69,171 yesterday after gaining 50% in 2024. The legalization of Bitcoin ETFs is boosting demand for the currency. Additionally, investors are becoming more comfortable with cryptocurrencies after the 2022 pessimism.
Meme-token activity in the crypto sector shows a growing risk appetite. As of March 5, Shiba Inu (CRYPTO: SHIB) has outperformed Bitcoin with a 200% return in 2024. Shiba Inu became famous after a 45,278,000% gain in 2021, which could have turned a $3 investment into over $1 million. It has fallen 75% from its all-time high, even after its significant gain this year, but might this be the start of another historic run?
Some say 2022 was the most chaotic year in crypto history. Investor trust was shaken by the de-pegging of TerraUSD and the collapse of FTX, a major crypto exchange. By 2022, Bitcoin was 76% below its peak due to inflation and interest rate increases. Even the most regulated crypto exchange, Coinbase, lost 86% of its value that year.
Failures removed the crypto industry's excitement that led to fraud and unethical behavior. The 2023 prosecution of FTX founder Sam Bankman-Fried and Binance's Changpeng Zhao showed regulators' willingness to defend investors. That restored asset class confidence.
The stock market's 2023 rebound boosted risk asset sentiment, giving investors the green light to buy Bitcoin again. Shiba Inu's speculative market didn't start last year because it wasn't ready.
Using cryptocurrency like traditional currencies was once hoped for. Consumers and businesses would have to accept them, increasing their worth. Although there are 334 million businesses worldwide, only 9,393 accept Bitcoin. Only 920 businesses join Shiba Inu, faring poorly.
Given its restricted quantity and worth as the most valued cryptocurrency, many investors believe Bitcoin is a store of value like gold. Shiba Inu, on the other hand, is abundant and only helpful for speculation without widespread adoption as a payment instrument. Its supply issue will hinder price rises. Its market valuation is $19 billion, yet it trades for $0.000032 due to 589.3 trillion tokens in circulation.
Shiba Inu tokens are being burned to reduce supply, but it may prove futile. It's tempting to buy a meme token like Shiba Inu after its 2021 millionaire run. History does not predict future performance, and predicting speculative cycles in any asset is impossible.
Shiba Inu buyers at the peak of the 2021 frenzy lost 75%. Its price may represent the cycle's peak. Bitcoin, the cryptocurrency leader, may be ideal for investors. Owning ETFs has never been easier due to the large variety available.
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