What’s next for Shiba Inu (CRYPTO:SHIB)? That’s a natural question to ask after the digital token skyrocketed in the ballpark of 52,000,000% this year.
Some predict a huge downturn for the cryptocurrency. Others think that there are still several catalysts that could drive Shiba Inu even higher. One of the most important of those catalysts is the possibility that Robinhood (NASDAQ:HOOD) could announce support for the coin.
So far, Robinhood executives have dragged their heels when it comes to including additional digital tokens on its trading platform. However, this sluggishness hasn’t dampened hopes that a positive decision could be on the way. But just how much would Shiba Inu soar if Robinhood adds the altcoin?
Image source: Getty Images.
Looking back
Arguably, the best way to determine how much Shiba Inu’s price could jump if it’s added to Robinhood is to look at the experiences of other digital coins. Robinhood first launched support for cryptocurrency trading on Jan. 25, 2018 (in select markets) with support for Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH).
How much of an impact did this announcement make? Not much. The chart below shows how the two cryptocurrency prices changed then.
Bitcoin Price data by YCharts.
Within a matter of days, the gains for Bitcoin and Ethereum evaporated. But those were and still are the two biggest cryptocurrencies on the market.
Robinhood announced the addition of Litecoin (CRYPTO:LTC) and Bitcoin Cash (CRYPTO:BCH) on July 12, 2018. Their moves were more dramatic on the news, right? Actually, no.
Litecoin Price data by YCharts.
Let’s try again. Robinhood rolled out support for Dogecoin (CRYPTO:DOGE) only four days after enabling the trading of Litecoin and Bitcoin Cash. How did Dogecoin fare?
Dogecoin Price data by YCharts.
Unlike its predecessor cryptocurrencies on Robinhood, Dogecoin delivered an impressive gain after being added to the platform. There’s a good case to be made that Dogecoin is a better comparison for Shiba Inu than Bitcoin, Ethereum, Litecoin, or Bitcoin Cash.
Both Shiba Inu and Dogecoin are meme coins. Both use the Shiba Inu dog as their mascots. Shiba Inu supporters even invited the comparisons by referring to the token as the “Dogecoin killer.”
Different dynamics
Should we assume that Shiba Inu’s move would be in the same ballpark as Dogecoin’s nice jump if Robinhood adds the altcoin? Not necessarily. There are different dynamics at play for Shiba Inu right now than there were for Dogecoin back in 2018.
At the time that it was added to Robinhood, Dogecoin was up less than 750% since its launch. The digital token had plunged more than 80% from its high set earlier in the year. But the really big run-up for Dogecoin was yet to come.
It’s currently a very different story for Shiba Inu. As mentioned earlier, the coin has skyrocketed roughly 52,000,000% this year. Sure, Shiba Inu is down 56% below its high mark on Oct. 28, 2021. However, it’s a long way from dropping as much as Dogecoin did when it was included on the Robinhood trading platform.
There’s also a case to be made that expectations that Robinhood will add support for Shiba Inu are at least partially baked into its price. Investors have been speculating for a while now that Robinhood could soon include the altcoin.
A best guess
We can’t know for sure how much Shiba Inu might soar if and when Robinhood announces support for the cryptocurrency. However, I’ll put forward my best guess.
I don’t think that investors will essentially yawn as they did when Robinhood added Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. On the other hand, I also don’t expect as big of a move as Dogecoin enjoyed.
My hunch is that Shiba Inu could vault 20% to 30% higher if Robinhood decides to include it. We could even see Shiba Inu inch past Dogecoin in the rankings based on market cap.
This assumes, though, that the overall environment for cryptocurrencies is still positive. If that’s not the case, all bets are off.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.