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Key Points
Since late afternoon Friday, the price of Shiba Inu (CRYPTO: SHIB) traded close to 7% lower, as of 11:53 a.m. ET today. There is no obvious reason behind the move, but the token is likely struggling along with the broader crypto market.
Crypto is always unpredictable
Coming off a dovish speech from Federal Reserve Chair Jerome Powell on Friday in Jackson Hole, many would have expected cryptocurrencies to be surging right now because the sector has historically benefited from lower interest rates.
However, a Bitcoin whale over the weekend sold 24,000 Bitcoin, according to media outlets, triggering a "flash crash" that appears to be impacting the sector right now.
Whales are crypto investors that hold a large amount of any one token. A flash crash is an event that forces an asset price to fall very quickly. These are usually followed by recoveries, but can also trigger forced liquidations. Viewed as a bellwether for crypto, Bitcoin's daily moves up and down tend to influence the entire sector.
What to make of Shiba Inu
Launched as a meme token in 2020, Shiba Inu has largely been viewed as a viral sensation, opposed to offering any real-world utility. The token launched as an ERC-20 token, meaning it was built on Ethereum's network.
In recent years, the developers have added more depth to Shiba Inu, particularly through Shibarium, a Layer-2 blockchain solution that processes transactions off chain, and incorporates a burning mechanism, which will help decrease Shiba Inu's massive supply.
While that's certainly progress, I still find the token to be too speculative and lacking in real-world utility compared to peers. I would avoid Shiba Inu, or only invest a small amount that you don't mind losing.
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This article has been published in fool.com via Yahoo News
Why Shiba Inu Is Falling Today
The entire crypto sector struggled today, led by Bitcoin, the world's largest cryptocurrency.
finance.yahoo.com
