Shiba Inu is arguably one of the biggest meme tokens ever, second only to Dogecoin. At its peak in October 2021, the coin had racked up a market cap of over $40 billion, and it is now accepted as a means of payment at popular retail stores, like GameStop and Nordstrom. Like all cryptocurrency, however, investing in Shiba Inu is risky. Therefore, ensure you do your due diligence before adding this meme token to your portfolio.
Investing in cryptocurrencies, decentralized finance (DeFi), and other initial coin offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.
What Is Shiba Inu?
Digital currencies are types of currencies that you cannot touch or feel. Unlike conventional currencies, they only exist virtually. Cryptocurrencies are popular examples of digital currencies. A meme token like Shiba Inu is one coin you might have encountered in your research. This token rose to popularity in 2021 and is still a favorite choice for investors today.
Ryoshi is the alias used to identify the creator of this dog-themed cryptocurrency, invented in 2020. Coinbase director Conor Grogan has suggested Ryoshi might be linked to Alameda Research, FTX’s sister company. Its popularity is only rivaled by the Yuga Labs NFT collection Bored Ape Yacht Club, especially with its massive Shiba army promoting the coin on various socials.
Shiba Inu is known particularly for its Japanese dog mascot and high volatility. It was created as a solution to Dogecoin’s inefficiencies, but it still doesn't have much use case. Either way, some retailers and companies accept it as a means of payment. Examples of such companies are NOWpayments, Gucci, and Nordstrom.
The Shiba Inu ecosystem is expected to grow, especially with the release of Shibarium’s beta version in March 2023. Shibarium is Shiba Inu’s Layer 2 solution, the blockchain where Shiba Inu and other tokens in the Shiba ecosystem, like Leash and Bone, are deployed. The Shiba ecosystem also has a metaverse called the Shiba Metaverse, which gives users a place they can build, run, and grow their projects. The immersive virtual world features a WAGMI temple, the first of 11 HUBs in SHIB The Metaverse, which previewed at the SXSW XR Experience also in March 2023. These and more are all the exciting developments happening in the Shiba Ecosystem.
Doing your research before buying any cryptocurrency, especially meme tokens, is important. Many cryptocurrencies look legit, but more research can show you the ones worth investing in. A good rule of thumb is to read the whitepaper or litepaper of the crypto you intend to buy; a litepaper, if you can find it, is better. It is the concise version of a whitepaper that will give you the information you need to make a better decision.
How To Buy Shiba Inu
To buy Shiba Inu, you will need a cryptocurrency exchange or wallet. While a crypto wallet allows you to purchase or sell Shiba Inu, a cryptocurrency exchange gives you much more flexibility to trade Shiba Inu futures and even earn from staking. Here is how to buy Shiba Inu on a crypto exchange:
- Step 1: Sign up for an account at a reputable crypto exchange. You can choose from over 20 options, including Coinbase and Kraken.
- Step 2: Complete the Know Your Customer (KYC) process on your selected exchange. This critical process is part of the AML (Anti-Money Laundering) policies followed by a number of different countries. Exchanges are mandated to carry out KYC to check for criminal activity, largely due to the anonymous nature of crypto.
- Step 3: Browse through the available Shiba pairs on the exchange. Usually, Shiba Inu is paired with more popular cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH).
- Step 4: Fund your account, choose the Shiba pair you want to purchase, place an order for the amount you want to buy, and wait for your order to be filled.
- Step 5: Your Shiba Inu will appear in your wallet in a matter of seconds.
Alternative Ways To Buy Shiba Inu
Crypto exchanges are the best way to get Shiba Inu. However, they are not the only way. You can also buy Shiba Inu from other people directly. To do this, you first need to find a physical or online seller willing to exchange their Shiba for money. When you both agree on quantity and price, the seller transfers the Shiba Inu to your Shiba Inu wallet address in exchange for your fiat.
Alternatively, you can swap other crypto types in your wallet for Shiba Inu instead of depositing crypto or fiat money. Find a suitable trading pair and sell your existing crypto for Shiba Inu. The process happens instantaneously.
Unlike traditional brokerage firms, cryptocurrency exchanges are not members of the Securities Investor Protection Corp. (SIPC). Therefore, unless user terms specify otherwise, investors with cryptocurrency assets commingled on a custodial cryptocurrency exchange could potentially lose their funds as unsecured creditors.
What You Need To Open a Cryptocurrency Exchange Account
There are certain requirements that need to be met for you to open an account on a cryptocurrency exchange. Let’s explore them now.
Most cryptocurrency exchanges, especially centralized ones, will require you to fill out personal information before accessing its full features. This information is needed to complete the KYC process.
Here is the personal information you will need to submit:
- Legal name as appears on your documents
- Date of birth
- Address (street, city, ZIP code)
- Email address
- Phone number
A critical step is to ensure that your information has been entered correctly, as any irregularities in your application could delay account approval. Once your account is approved or verified, you can instantly start trading.
The minimum deposit required will vary depending on which exchange you use and which payment method you use. For example, if you use a debit or credit card, you might need to deposit a minimum of $10 to $50. For other methods like peer-to-peer (P2P) or direct fiat deposit, you can deposit as little as $2 on many exchanges. Many crypto exchanges do not require you to maintain a specific balance; however, the amount you can trade values anywhere between $1 to $20.
Types of Cryptocurrency Exchanges
A centralized exchange is a cryptocurrency exchange owned by a company or an entity that helps you trade your crypto for a fee by acting as a go-between. These exchanges save you the stress of waiting for orders as they have better liquidity resources. Centralized exchanges also allow you to save and earn crypto.
This crypto exchange allows you to trade or swap your crypto directly with a buyer or seller by creating a connection to their crypto wallets, thereby removing the need for a central authority. These exchanges are usually safer than centralized exchanges as they do not store crypto on a centralized exchange.
Perhaps the most compelling argument for choosing decentralized exchanges is that it shields you from being tied to situations like the FTX collapse, since your assets are held separate from a centralized exchange wallet. In other words, if a decentralized exchange were to be hacked or the company operating it becomes insolvent, user funds would remain unaffected.
These exchanges combine the functionalities of decentralized and centralized exchanges by giving users greater liquidity than typical decentralized exchanges. Many hybrid exchanges use smart contracts to secure transactions and ensure the safety of funds for all parties involved.
Best Cryptocurrency Exchanges
Factors To Consider When Opening a Cryptocurrency Exchange Account
Security: Security is essential to prevent the loss of your funds. Ideally, you should choose an exchange with two-factor authentication (2FA), another measure that can protect your crypto from hackers. In addition, ensure that you choose an exchange with a strong reputation and cybersecurity track record.
Fees: An exchange with high fees will eventually cost you more, especially if you are a frequent trader or investor. It is best you look for an exchange with moderate deposit, withdrawal, and trading fees.
Number and quality of supported cryptocurrencies: While you want to go for an exchange that supports a wide number of cryptos, you do not want to go with one that lists just any kind of crypto. Look at all the crypto an exchange offers and see if all are thoroughly vetted.
Wallet quality and safety: The quality of a wallet’s security features is a critical factor that can help you enjoy crypto investing for the long term. It is imperative that you choose an exchange that offers a secure wallet with multi-layer security measures and a strong reputation for security.
Storage and custody: Do you prefer a custodial or non-custodial wallet? While a custodial wallet makes your crypto more accessible, it is more susceptible to hacks. A non-custodial wallet leaves everything in your hands, but this also means when anything goes bad, you take full responsibility. For the safety of your funds, choose a decentralized exchange. This type of exchange gives you exclusive access to your crypto and can help prevent the misappropriation of user funds that was at the center of the 2022 FTX collapse.
Shiba Inu is based on the Ethereum blockchain, so when you initiate a transaction, the transaction is recorded on the blockchain and cannot be altered. This info is linked to all others in the block to form the blockchain, where transactions are finally approved with consensus.
There are several use cases for Shiba Inu. Traders or investors can make money through price speculation. Holders can use it as a payment method for real-life commodities at accepted retail outlets and/or to buy Shiboshi NFTs on the Shiba ecosystem. Advanced users can use their existing Shiba Inu tokens at liquidity pools to gain rewards.
The primary way to earn with Shiba Inu is to stake your coins. Many exchanges offer this service, allowing you to earn a fixed percentage of money for a specific period. To stake your Shiba Inu, you must have some of it in your wallet. When you’ve satisfied this requirement, search for the staking section on your preferred exchange and choose a time frame you are comfortable with, then stake your Shiba Inu tokens.
Another way you can earn is by burning your tokens on the Shibaswap portal. Burning means removing cryptocurrencies from circulation, reducing the total supply in the process. In most cases, burning helps a coin’s price appreciate. When you burn your Shiba Inu, you get rewarded with another token in the Shiba ecosystem.
It's important to remember that crypto assets are high-risk investments. Therefore, conducting thorough research is essential before making the decision to add Shiba Inu to your crypto portfolio.