It's no secret that cryptocurrencies can reach unimaginable prices seemingly overnight. There was no better example of this than in 2021, when Shiba Inu (CRYPTO:SHIB) rose by almost 900% within a few weeks.
Unfortunately, Shiba Inu's known shortcomings will likely hinder its ability to repeat its previous success. For investors looking for a safer and more reliable route to wealth in the world of cryptocurrencies, there is no better choice than Bitcoin (CRYPTO:BTC).
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Breaking down the basics
There are countless reasons why Bitcoin is better than Shiba Inu, but the most influential and obvious reason is one: supply. In this respect, Bitcoin is the opposite of Shiba Inu.
Shiba Inu has more than 589 trillion tokens in circulation today. Bitcoin only has 19.25 million. While the supply of meme coins is infinite, the number of Bitcoins is capped at 21 million, with the remaining 1.75 million slated to enter circulation gradually and at a decreasing rate over the next 116 years.
Bitcoin is algorithmically controlled through a process called “halving” and is much better suited for long-term value appreciation due to its robust monetary policy. Approximately every four years, the reward miners receive for validating transactions is halved. This reduction in the reward rate leads to a decrease in the creation of new Bitcoins and contributes to the overall scarcity of the cryptocurrency.
The halving process will continue as planned until 2140, the year the last Bitcoin will be mined, and the cryptocurrency will enter unprecedented territory.
Although Shiba Inu's price was able to outperform the token's supply in its early days, today it poses more of a challenge as the market becomes more familiar with its flawed structure. Recognizing the disproportionate supply, Shiba Inu developers introduced a burning mechanism to reduce supply and artificially inflate the price. So far the efforts have been unsuccessful.
The story goes on
When the crypto market surged in 2023, Shiba Inu was more or less left behind as its overwhelming supply exceeded demand. While Bitcoin grew by more than 150%, Shiba Inu climbed a meager 25%.
Bitcoin is just getting started
The difference between Bitcoin and Shiba Inu serves as a microcosm of the growing inequality between Bitcoin and the rest of the crypto market. While developers implement upgrades and solutions to make other cryptocurrencies more functional, Bitcoin does not have a team of developers manipulating it.
That's because Bitcoin doesn't need them. Its original design is simple and powerful, embodying what a cryptocurrency should be. Day after day and year after year, Bitcoin continues to function as it has since its inception in 2009, with no developers or centralized entities. It should come as no surprise that Bitcoin has become the most valuable cryptocurrency as it is also the most secure, decentralized and resilient.
The best part is that this realization is solidifying and leading to tight supply on its current path to further demand. Take the recent approval of 11 new Bitcoin ETFs as evidence of this. For years, Bitcoin was viewed as a speculative and worthless asset used only by criminals. Today it is the most valuable cryptocurrency with a new home on Wall Street.
Analysts like Cathie Wood, CEO of Ark Invest, believe that increasing adoption of traditional finance could be the catalyst that pushes Bitcoin to new heights. With tens of trillions of dollars at their disposal and only 1% of that capital flowing into Bitcoin from institutional investors, its price could reach more than $1.5 million. That would be an increase of more than 3,000% compared to today's prices.
Is that enough to make you rich? Who is to say that? The term “rich” is clearly subjective and varies from person to person. Although the cryptocurrency market is full of uncertainties, there is little more objective than the simple fact that Bitcoin is built for the long term and remains the best option for investors seeking true decentralization, security and scarcity.
Should you invest $1,000 in Bitcoin now?
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RJ Fulton holds positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Forget Shiba Inu: This Cryptocurrency Could Make You Rich was originally published by The Motley Fool
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