The Shiba Inu Coin (SHIB) has been on a rollercoaster ride in the past few weeks, with its price peaking and then rapidly falling. This has left many investors wondering why the token is crashing and what the future holds for it. The answer lies in its lack of a competitive edge in the industry, as well as the fact that it relies heavily on the 'greater fool theory'. The 'greater fool theory' suggests that most people buy Shiba Inu Coin to sell it to others for more in the future.
This means that once its price peaks, these investors are likely to sell their tokens and move on to another investment. This may have already begun, as the price of Shiba Inu has fallen rapidly in the past two weeks. And because it lacks a competitive edge in the industry, it may struggle to recover after it crashes. The recent Shiba Inu rally was triggered by the massive pumping of Shiba Whale, however, as the price started quickly, the Whales made a huge profit, therefore, the big whales dumped heavily and made huge profits out of it. This high concentration of owners makes Shiba Inu risky because these people can easily move the price. Creative Planning CEO Peter Mallouk said that the Shiba Inu coin will not be very successful in the future, as it will crash after making a big rise.
In other words, this explosive growth is not due to Shiba Inu's strength as a cryptocurrency, but to its supporters artificially inflating its price. Shiba Inu's falling price may make it an attractive investment, but it is more dangerous than it seems. Two experts recently explained why the Shiba Inu currency could soon crash, even if it experiences a meteoric rise. In recent trends, Shiba Inu has behaved opposite to the momentum of the cryptocurrency market, especially Bitcoin. This turns out to be a worst-case scenario, as once Shiba Inu's trading value rises again, large investors could start dumping again. The Financial Conduct Authority said cryptocurrencies, such as Shiba Inu coin and Dogecoin, can be risky for investment because they have a very fast-moving market.
If you want an example of how volatile the cryptocurrency market can be, look at what has happened to the Shiba Inu coin in the last two days. So why is SHIB going down? Given that there is no major news specific to the SHIB coin and the rest of the cryptocurrency market is having a fairly soft day so far, it is likely that speculators started cashing in their SHIB coin once prices started to rise yesterday. In other words, SHIB's success yesterday has probably led to its losses today. Mentions of SHIB on Twitter outnumbered those of DOGE. SHIB attracted 2,603 tweets, while DOGE was mentioned in 2,005 tweets according to Cointrendz data.
SHIB was the fourth most mentioned coin on Twitter. The token came behind Bitcoin, Ethereum and Velas which attracted 10,876, 6,986 and 3,085 tweets respectively. Shytoshi's tweet was retweeted by the Shib token's official Twitter account with an 'eyeball emoji'. Shiba Inu issued a warning to its investors on Monday regarding a scam on Telegram and warned its Twitter followers that it was not offering any promotions including airdrops bonuses freebies or giveaways. It is clear that investing in Shiba Inu Coin carries significant risks due to its reliance on 'greater fool theory' and lack of competitive edge in the industry. While there is no guarantee that these investments will survive for decades they have real advantages over trendy cryptocurrencies like Shiba Inu.
Like its predecessor Dogecoin Shiba Inu has a large community of supporters who have invested heavily in the cryptocurrency to drive up its price.