Why is Shiba Inu down today?
THE value of Shiba Inu tokens has plunged by almost 45% over the past 24 hours.
It comes after the cryptocurrency, which features the same Shiba Inu dog as Dogecoin, rose by 13% a couple of days ago.
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The meme tokens also rocketed by an even higher 130% over 24 hours earlier this week.
The spike came as Binance announced it would be listing Shiba Inu coins – which means buyers and sellers can trade them on the platform.
But it's unclear if the meme-themed coins are legitimate – which means your money is at risk and you’re more open to fall for a scam.
Shiba Inu, which launched last year, has proclaimed itself to be the "Dogecoin Killer".
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
Buying cryptocurrencies and decentralised finance tokens as well as stocks and shares is always a risky business.
Investing is not a guaranteed way to make money, so make sure you know the risks and can afford to lose the money.
Cryptocurrencies are also highly volatile, so your cash can go down as well as up in the blink of an eye.
As always, you should never invest in something you don't understand.
Why is Shiba Inu down today?
The value of Shiba Inu is currently sitting at $0.00001613, compared to a higher $0.000036 on May 11, according to CoinMarketCap.
Its value has dived by 43.90% over the past 24 hours.
Shiba Inu has plunged alongside other cryptocurrency markets today after recording major gains since the start of the year.
Bitcoin, for example, has crashed as Elon Musk announced Tesla would no longer accept the cryptocurrency for buying cars.
He banned the payment method due to the environmental impacts of Bitcoin mining.
How to spot crypto scams
CRYPTO scams are popping up all over the internet. We explain how to spot them.
- Promises of a high or guaranteed return – Does the offer look realistic? Scammers often attract money by making fake promises.
- Heavy marketing and promotional offers – If they are using marketing tricks to con customers you should beware.
- Unamed or non-existent team members – Just like any business you should be easily able to find out who is running it.
- Check the whitepaper – Every crypto firm should have a white paper. This should explain how it plans to grow and make money. If this doesn't make sense, then it could be because the founders are trying to confuse you.
- Do your research – Check reviews online and Reddit threads to see what other people think.
Experts believe the Shiba Inu altcoin has been created to ride the tailcoats of Dogecoin's success.
With Dogecoin currently down by 20% to £0.29 ($0.40) over 24 hours, this could have affected Shiba Inu tokens too.
Antony Portno, founder of Traders of Crypto, said: "While Dogecoin has some actual merit as the one 'fun coin', Shiba Inu is a far more manipulative and cynical asset.
"It again has no real purpose or use case other than to make the founders money and has been created with a huge supply allowing for a very low price per coin in the hope that people who don’t understand these things will think it’s cheap relative to Doge.
"It's also very unclear who is behind the coin and what the circulating supply is which are both red flags to any sensible investor."
What are the risks of investing in cryptocurrencies?
Investing in cryptocurrencies is essentially gambling and there are no guarantees that you will see what you pay in go up in value.
Cryptocurrencies are VERY high risk and a speculative investment, with limited track records and no underlying value.
There is also no guarantee that you can convert crypto assests back into cash, as it may depend on the demand and supply in the existing market.
Newer cryptos, such as Shiba Inu, are always riskier than those who've been around longer, like Bitcoin, meaning you're more open to scams.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, added: "Investors should treat trading in cryptocurrencies with extreme caution, and dabble at the edges of their investment portfolio, only with money they can afford to lose."
While Nigel Green, chief executive of deVere Group, said: "Extreme caution should be exercised before investing in un-tested cryptocurrencies.
"The price swings can be expected to be wild and there’s a legitimate risk that investors could get burned."
In January, the Financial Conduct Authority warned that Brits risk losing ALL of their money if they invest in cryptocurrencies.
Meanwhile, an advert for a bitcoin exchange Coinfloor was banned in March for telling savers cryptocurrencies are a safe investment.
People considering investing in Bitcoin or shares and stocks have also been warned over "risky" tips being shared on TikTok.
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