Shiba Inu (SHIB) price prediction: Could this be the start of a much bigger rally?

The excitement in the crypto markets has been picking up steam in recent weeks. Investors have become more optimistic about the economy as a whole, which has fueled Bitcoin and other cryptocurrencies along the way.

Investors have become more optimistic about the economy as a whole, which has helped fuel Bitcoin (BTC 0.14%) and other cryptocurrencies along the way. That interest has helped propel Shiba Inu (SHIB 0.55%) to a gain of around 20% in just the past month.

However, with the meme coin struggling for much of the year, could this be just the start of a much bigger rally -- one that may be over due?

Could it be time for a rotation?

Under President Trump, there's been much more hope around crypto-related reform and policies, which can help digital currencies soar in value. Bitcoin ended up hitting $100,000 about a month after his election win last year. Recently, it hit a new high yet again, proving that it may not have peaked just yet.

But with Bitcoin's valuation at all-time highs, there could be some apprehension from crypto investors to continue buying into the rally, especially with no visible catalyst to suggest it should go higher in the near term. That's why a possible rotation may be over due, and why Shiba Inu's coin may look more attractive to investors. At an $8.4 billion market cap, it's a fraction of the size of Bitcoin (worth around $2.1 trillion), and it's even well behind Dogecoin, which has a valuation of nearly $33 billion.

Shiba has been a popular coin with retail investors, and with the Shibarium completing its billionth transaction last month, showing proof of its growing adoption in the crypto world, a rally could be over due.

Shiba Inu is still no where near its highsAnother reason investors might consider buying Shiba Inu is that its valuation is fairly low with respect to where it was late last year, not just compared to other coins. On Monday, the coin was trading at around $0.00001431. But back in December 2024, it was at more than double that price, and on Dec. 4, 2024, it closed as high as $0.00003284.

Now, there's no guarantee that Shiba's coin will return to that kind of valuation any time soon. But it has normally been one of the more popular meme coins, and with it lagging far behind Dogecoin and now being just the 16th most valuable coin in the crypto world (Dogecoin is eighth), investors may see some attractive potential for the meme coin to make up for some lost ground.

Without a catalyst, however, it's anyone's guess if or when a stronger surge in value may happen for Shiba Inu. But amid loosening crypto restrictions and the possibility of more coins launching their own spot exchange-traded funds this year, there may still be more bullishness and excitement to come into the crypto world as a whole. And if Shiba Inu and its battered-down valuation attracts investors, it may have a lot to gain from any positive developments in the broader crypto market.

What are the risks of investing in cryptocurrencies?

Cryptocurrencies are a risky investment, and it's important to understand the risks before investing. The value of cryptocurrencies can fluctuate rapidly, and investors could lose money.

Cryptocurrencies are not regulated by the U.S. Securities and Exchange Commission, and they are not a form of legal tender.

Investors should only invest what they can afford to lose, and they should do their own research before investing in any cryptocurrency.

Should you buy Shiba Inu coin?

There are a lot of potential upsides for Shiba Inu, but there's also plenty of risk that comes with holding it. The coin's movements can be sudden and erratic. While Shiba Inu has been rising in value over the past month, there has been plenty of volatility along the way.

For most investors, crypto is too risky to invest in; Shiba Inu, being a meme coin, is an even riskier option to consider holding on to. If, however, you want to take a chance on Shiba Inu, my suggestion is to only allocate a small portion of your total portfolio to it -- an amount that if you lost it, you wouldn't lose sleep over it.