The best cryptocurrency to hold in 2023: Dogecoin or Shiba Inu?
Sometimes it’s better to be lucky than good; investors in meme token crypto-currencies like Dogecoin and Shiba Inu earned massive returns at the height of the crypto bull market in 2021. But the good times are over for now; rising interest rates have cooled investors’ appetite for riskier assets like crypto, and these two coins have given back much of those gains.
There is hope for a market rebound in 2023, which could give investors the confidence to venture back into altcoins. But don’t rush into these meme currencies; consider the market landscape and this vital information before putting your hard-earned money to work.
Adoption drives demand, which drives value
Digital currency functionality is the fundamental purpose of many tokens. A coin must have functionality, otherwise why would anyone want it? It would be like receiving your paycheck but not being able to spend it. Fiduciary currency has value because it is accepted just about everywhere, even in most foreign countries.
Lack of adoption is the main obstacle for Dogecoin and Shiba Inu. Some merchants accept Dogecoin and Shiba Inu, but you can’t usually use them to pay for groceries at the grocery store. You can’t hire many people who will accept Dogecoin as payment. At this point, both coins are more novelties than anything else.
The surge that these coins experienced in 2021 was driven by frenzied excitement, which mimicked the demand effect as they were very popular for a short period of time. However, it ended like a game of musical chairs; the music stopped, and investors who had bought near the top and failed to sell quickly enough saw most of their gains evaporate.
Unless the market becomes wildly speculative again, it may take an adoption to generate real demand for these coins, and none of them have much use in the real world at the moment.
The math works against both coins
Supply is the other factor that affects the value of money. You can see below that inflation took off when the total supply of US dollars increased during the pandemic. The increase in the number of US dollars reduced their purchasing power.
The same concept applies to digital currencies; one of the attractions of bitcoin is that there will only ever be a maximum of 21 million coins. An increase in demand would only increase their value, because there are only so many bitcoins. In contrast, the supply of Dogecoin is unlimited, with 10,000 DOGEs entering circulation every minute. Shiba Inu was built with a maximum supply of 1 quadrillion, which is over 47 times the total money supply of the United States! There are approximately 589 trillion tokens in circulation today, making it highly unlikely that Shiba Inu could ever maintain a meaningful price per token.
Limited adoption and abundant supply make Dogecoin and Shiba Inu crypto-currencies unlikely to be useful or valuable in the long run. Both currencies are memes and should be treated as such, purchased only with money you have no problem losing.
Consider this superior altcoin instead
But this bear market may be a buying opportunity; consider Ethereum over Dogecoin or Shiba Inu. Ethereum has the highest market value of any altcoin and is the most widely used blockchain, hosting about 3,000 decentralized applications. The coin has dropped 75% from its peak, but the thousands of apps running on the Ethereum blockchain give it a better chance of mainstream adoption as the crypto industry grows and matures.
Bear markets don’t come along every day, and you don’t want to waste the opportunity to chase the fluff And ignore the high-quality assets that are on sale. Keep your investments in meme currencies like Dogecoin and Shiba Inu to a minimum and focus on Ethereum and other cryptos with a realistic chance of real long-term value.