Best cryptocurrencies to own in 2022: Dogecoin or Shiba Inu?

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Understanding Shiba Inu After a year that saw Shiba Inu return to 63,000,000% and Dogecoin increase 4,600%, can investors still get rich in 2022? Here’s what you need to know before buying any of these cryptos.

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Shiba Inu is a relatively new altcoin, i.e. a crypto other than Bitcoin, developed in August 2020 on the Etherium blockchain. It currently carries a market cap of $ 19.4 billion and is the 10th most popular crypto on the Coinbase exchange.

An anonymous group called Ryoshi started Shiba Inu as a decentralized spontaneous community building experiment. In other words, could Shiba Inu survive without “no centralized team, no funding and no direct leadership?” According to the play’s white paper.

Shiba Inu earnings seem to answer that question, and with a coin price of a few fractions of a cent, investors can rack up large sums for relatively little money.

Understanding Dogecoin

Dogecoin, often referred to as the original “meme coin”, is an altcoin created in 2013 as a literal joke by its founders. They created Dogecoin to poke fun at the wild speculation around cryptocurrencies at the time.

Like Shiba Inu, Dogecoin uses an easily recognizable logo of a Shiba Inu dog, which has helped fuel the coin’s popularity on the internet. Although Shiba Inu is built on the Etherium blockchain, Dogecoin operates on its own network, the Dogecoin blockchain.

However, Dogecoin is no longer a joke; it is the ninth most popular cryptocurrency on Coinbase and carries a market cap of $ 23.4 billion, making it larger than some of the most popular growth stocks on the market. It also has a relatively low price per coin of around $ 0.18.

Value based on going viral

It is important to know what determines the value of a cryptocurrency and how altcoins like Shiba Inu and Dogecoin differ from Bitcoin. While the US dollar is issued and regulated by the US government and the central bank, cryptos are not. This detachment from the traditional monetary system (hence the term decentralized) appeals to many crypto investors.

But there are significant differences between Bitcoin and altcoins like Dogecoin and Shiba Inu. The scarcity and growing acceptance of Bitcoin has played a key role in increasing its value over the years. There is a maximum supply of 21 million Bitcoins; there can never be any more.

Bitcoin has also gotten noticeable traction to gain acceptance in the wider economy. Some merchants accept Bitcoin as a form of payment, some athletes take their salary in Bitcoin, and some companies even accumulate it to keep it on their balance sheet as an asset.

On the other hand, Shiba Inu and Dogecoin do not have any noticeable economic utility at this stage. Meanwhile, both altcoins have a much larger supply in circulation than Bitcoin. Dogecoin now has 132 billion DOGE in circulation, while Shiba Inu has 549 trillion SHIB. These huge supplies are increasing, which is part of the reason their prices per piece are so low. To date, the only way these coins have gained in value is by going viral on the Internet; these temporary surges in demand have made prices very volatile.

Risk management is the key

Shiba Inu is a newer coin and probably has more buzz now, as the Dogecoin spike appears to have arrived when Tesla CEO Elon Musk tweeted about it a few months ago.

Investments that fluctuate primarily due to the hype are speculative, and investing heavily in them is unwise. What goes up can just as easily go down, so assets that have appreciated as much as Shiba Inu and Dogecoin can go down significantly without warning.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Investors should manage their risk by never investing more than what they can afford to lose. With the crazy swings in speculative cryptocurrencies, it doesn’t take big bucks to make big profits. If you are lucky enough to make big gains, don’t be afraid to take a profit.

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