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Better Cryptocurrency To Buy With $1,000 Right Now: Solana Vs. Shiba Inu
When comparing the outcome of investing in the primary token of a major blockchain like Solana (CRYPTO: SOL) or investing in a silly meme coin like Shiba Inu (CRYPTO: SHIB), the results are often surprising. And for some investors, they might even be frustrating.
So let's unpack the differences in the balance of risk and reward with these two tokens. With a quick bit of study, you'll know exactly which one is the better option for your investment of $1,000.
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This chain has lots of momentum, and it might get even more
Solana's market cap is currently near $114 billion, making it the fifth-largest cryptocurrency. As of Jan. 27, it reported more than $11 billion in trading volume over the prior 24 hours.
The chain is exposed to a plethora of ongoing and upcoming catalysts, ranging from it being the chosen home of the president's recently launched official meme coin, to the potential approval of Solana exchange-traded funds (ETFs) in the near term, and strong regulatory tailwinds stemming from the new pro-crypto administration in the U.S. In total, those drivers could potentially send the coin's price upwards of $500 in 2025, or perhaps even higher.
But that isn't even the entire investment thesis for Solana. The chain is by far and away the place where most investing in meme coins occurs. It's also a roaring hub for decentralized finance (DeFi) applications, non-fungible token (NFT) minting, and artificial intelligence (AI) infrastructure coins, and all sorts of other projects too. And thanks to a hard-working team, the chain is constantly being upgraded to ensure that its gas fees remain low, and that its transactions remain very rapid.
In sum, there's little chance that Solana will lose its relevance over the next couple of years, and that's why it's a very good choice for where to invest your $1,000.
Meme coins don't belong in the same sentence as more serious investments
As strong as the case for Solana may be, there is a very real chance that Shiba Inu will outperform it simply by dint of it being a meme coin with highly unpredictable and highly volatile price action.
With a market cap of above $11 billion, Shiba Inu is one of the largest meme coins, and it has been around for long enough that most investors should have confidence that it will continue to be around and retain at least a bit of its value. That also means on a long enough timescale, it is practically guaranteed to experience a wild run-up that causes it to multiply in value, at least temporarily. Selling it at the peak of that run-up would result in a very large gain for the investor, though timing your moves correctly is nearly impossible.
Of course, there is also the very large possibility of buying the coin precisely at the wrong moment, then proceeding to ride its price all the way back down to the dirt, leaving the investor with a loss of 80% or more.
If that game sounds like a scary one to play in search of large gains, it's because it is. And especially when you have a safer investment like Solana that's set up for a handful of catalysts and generally is begging to be bought, there's not much reason to allocate your capital to Shiba Inu or any other meme coin.
There isn't really a contest here. If you want exposure to cryptocurrency right now, buy Solana, not Shiba Inu. If you've already gotten the exposure to the more serious investments in the sector, and your portfolio is already fully diversified with even safer investments, it's permissible to nibble on some meme coins -- but don't do so with the idea that Shiba Inu is exceptional on that front, either.
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Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Solana. The Motley Fool has a disclosure policy.
