What is Shiba Inu and how to trade it

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What is Shiba Inu?

Shiba Inu is a decentralised ecosystem that operates on the Ethereum (ETH) blockchain. It was created by an anonymous developer known only as ‘Ryoshi,’ and launched in August 2020.

Its primary cryptocurrency, SHIB, is an ERC-20 token, meaning it runs on Ethereum’s blockchain and leverages its security and functionality. SHIB’s initial maximum token supply was one quadrillion tokens. The Shiba Inu community has undertaken token burns to reduce the supply over time, aiming to create scarcity and potentially boost value. SHIB is often referred to as a ‘memecoin’ due to its playful branding and its mascot – a Shiba Inu dog, similar to the one featured by Dogecoin (DOGE).

Despite its humorous origins, Shiba Inu has grown into a robust ecosystem, encompassing decentralised finance (DeFi) applications, non-fungible tokens (NFTs), and a dedicated community called the ‘ShibArmy.’ It also introduced innovations like Shibarium, a layer-2 scaling solution that launched on 16 August 2023, aiming to improve transaction efficiency and reduce fees.

As of December 2024, SHIB remains a prominent cryptocurrency and frequently ranks within the top 15 by market capitalisation.

Shiba Inu (SHIB) vs Dogecoin (DOGE): What are the differences?

Shiba Inu (SHIB) and dogecoin (DOGE) both feature a dog from the Shiba Inu breed as their mascots. They also have differences, which influence their role in the cryptocurrency market. Here’s how they compare:

*As of December 2024, data sourced from Coinmarketcap

Discover more about Dogecoin (DOGE) with its price history, how it works and more –  read our comprehensive guide to Dogecoin (DOGE).

How does Shiba Inu work?

Shiba Inu is focused on community and decentralisation, and operates on the Ethereum blockchain, which means it can interact seamlessly with Ethereum-based decentralised applications (dApps), adding to its potential utilities.

Its ecosystem consists of three key tokens: SHIB, LEASH and BONE, which serve distinct purposes:

• SHIB – The primary token of the ecosystem, used as a medium of exchange and store of value. SHIB remains the most widely recognised token, often referred to as the foundation of the Shiba Inu project.

• LEASH – A secondary token with a maximum supply of 107.53 thousand tokens, LEASH provides holders with exclusive benefits such as access to Shiboshi NFT minting.

• BONE: The governance token for Shiba Inu, allowing holders to participate in voting through the Doggy DAO, the ecosystem’s decentralised governance platform. With a maximum supply of 249.99 million tokens, BONE plays a role in incentivising network participation.

Here’s some of the key applications, products and features on the Shiba Inu ecosystem:

Shibarium (Layer-2 solution) – Launched in August 2023, Shibarium is a layer-2 scaling solution that enhances the speed and reduces the cost of transactions within the Shiba Inu ecosystem. It aims to boost adoption and usability.

ShibaSwap (decentralised exchange) – Launched in July 2021, ShibaSwap is a dedicated decentralised exchange (DEX) for the Shiba Inu community. ShibaSwap helps integrate Shiba Inu with DeFi by allowing users to trade SHIB and other tokens, stake BONE for rewards (via the ‘Bury’ feature), and provide liquidity to earn fees. 

Shiboshi (NFTs) – Launched in October 2021, Shiboshi is a collection of 10,000 unique, Shiba Inu-themed non-fungible tokens (NFTs) launched in October 2021. Shiboshis offer a unique burn mechanism through their renaming feature. When Shiboshi holders rename their NFTs, they incur a $100 fee in SHIB, which is then burned, contributing to the token's deflationary strategy.

What’s the SHIB price history?

SHIB launched in 2020, remaining relatively unknown in its early days until it started gaining traction in early-2021, coinciding with a broader cryptocurrency bull market.

Past performance doesn’t guarantee future results

By October 2021, SHIB’s price increased to its all-time high of $0.00008845. Growing interest in DeFi (decentralised finance) and the release of ShibaSwap earlier that year – combined with Elon Musk's cryptic tweets about the Shiba Inu dog breed – contributed to this rise. SHIB briefly surpassed DOGE in market capitalisation during this period, earning it the nickname ‘Dogecoin killer.’

Like many cryptocurrencies, SHIB faced a challenging market in 2022. A broader crypto market downturn, triggered by macroeconomic factors and the collapse of major crypto firms, led to a substantial price decline. Despite this, SHIB maintained a strong community base and continued to develop its ecosystem.

In 2023, SHIB saw renewed interest with the launch of Shibarium, its Layer-2 scaling solution. This development aimed to address scalability issues and reduce transaction costs, potentially increasing SHIB's utility and price.

SHIB's price movements in 2024 have been influenced by a combination of ecosystem developments and broader market trends. Community-driven burn initiatives – such as ShibTorch – also contributed to SHIB's deflationary efforts, with significant amounts of SHIB removed from circulation.

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Which factors might influence the SHIB live price?

A combination of factors, including ecosystem developments, its community, tokenomics and broader market trends, may influence SHIB's live price. Here’s a few of them:

Ecosystem developments and token utility

The Shiba Inu ecosystem’s development can influence the SHIB price.

For example, the launch of Shibarium in August 2023 brought improvements to transaction speed and efficiency, contributing to a substantial increase in network activity.

Conversely, delays or underperformance of ecosystem projects could dampen enthusiasm, potentially driving SHIB’s price lower.

Community, tokenomics and deflationary events

The ShibArmy –  Shiba Inu's dedicated community, could influence SHIB’s price.

ShibTorch, launched on 16 August 2024, is a community-powered ‘burn portal’ on the Shibarium Layer-2 network. Users burn SHIB tokens on ShibTorch to remove them from circulation and receive ‘BurntSHIB,’ a reward that generates passive income over time. By November 30, 2024, over 300 million SHIB had been burned through the semi-automated burn mechanism, with ShibTorch contributing to this deflationary effort.

Conversely, waning community interest or divisive sentiments among holders may put downward pressure on its price.

Broader cryptocurrency market trends

Like most cryptocurrencies, SHIB’s price often moves in tandem with broader market sentiment.

Upward price movements in major cryptocurrencies like Bitcoin (BTC) can often influence SHIB's price, with bullish trends contributing to price surges.In November 2024, as BTC approached the $100,000 mark, positive sentiment spilled over to SHIB and contributed to a price surge. 

However, when BTC's price dropped shortly after, SHIB’s price also experienced a downturn – which highlights SHIB’s potential sensitivity to broader market dynamics, and how significant events in the crypto industry can impact its price.

Regulatory developments and macroeconomic factors

Regulatory shifts and macroeconomic conditions significantly influence SHIB’s price.

In 2023, the US Securities and Exchange Commission (SEC) increased scrutiny on cryptocurrencies, targeting exchanges and token classifications. While this created short-term uncertainty, Shiba Inu remained unaffected due to its decentralised nature, which helped maintain trader confidence.

On the macroeconomic side, in early 2024, rising inflation rates in major economies drove interest in speculative assets, including SHIB, as a hedge. However, subsequent interest rate hikes by central banks dampened market enthusiasm, contributing to a period of lower trading volumes across the crypto market, including SHIB.

Discover price targets and analysts’ commentary in our article about SHIB price predictions. 

What are the Shiba Inu trading hours?

SHIB operates on a decentralised blockchain network that is active 24 hours a day, seven days a week. This means you can trade SHIB at any time, including weekends and holidays.

• Cryptocurrency exchanges – many exchanges facilitate 24/7 trading, allowing for continuous market participation.

• Online trading platforms – some reliable and trusted brokerages provide SHIB trading via CFDs with extended hours.

If you choose to trade CFDs, you can follow the SHIB performance live in US dollars with our comprehensive SHIB/USD price chart.

Monitoring the cryptocurrency’s activity can help you to keep an eye out for any key fundamental or technical events that may affect short-term movements in its value.

How to trade Shiba Inu

SHIB is a cryptocurrency, meaning that it can be traded directly on a cryptocurrency exchange or through peer-to-peer transactions. Traders may also choose to trade SHIB via a derivative, a financial product that takes (or ‘derives’) its value from the price of the underlying asset.

You could use a contract for difference, or CFD, to trade on the price of SHIB pairs. A CFD is a contract, typically between a broker and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

You can use CFDs to trade on whether you think an SHIB pair will rise (called ‘going long’) or fall (‘going short’). CFDs give you access to leverage, allowing larger positions with a relatively small outlay. This amplifies your potential profits, but also your potential losses, making CFD trading risky. 

You can learn more about trading cryptocurrencies with Capital.com in our comprehensive guide to cryptocurrency trading. 

Aside from CFDs, you can also trade SHIB pairs through instruments like futures, options, and ETFs. Each offers an alternative to the leveraged trading of CFDs, suiting different risk profiles and strategies.

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