Why Shiba Inu Is Sinking Today

Shiba Inu (CRYPTO: SHIB) is plunging on Thursday. The cryptocurrency lost 4% as of 1:30 p.m. ET and was down as much as 5.1% earlier in the day. The decline comes as the broader crypto market retreats amid growing economic concerns.

President Trump's sweeping tariff announcement has triggered a risk-off sentiment that's hitting speculative assets like Shiba Inu particularly hard.

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Tariffs spark economic uncertainty

President Trump announced extensive new tariffs on imports from countries around the globe. The tariffs are levied on almost every trading partner the U.S. has. The scale and breadth of them has shocked the market, since many had hoped the tariffs would be more limited or specifically targeted.

The fear that the tariffs have induced has created a risk-off environment, in which investors move away from speculative assets and toward more secure assets. They fear that the tariffs will lead to higher inflation and rising interest rates, exacerbating the issue.

Cryptocurrency in general is perceived as risky, but as a meme coin, Shiba Inu carries even more peril. It lives or dies on momentum and hype, both very susceptible to the uncertainty and fear that pervades a down market.

While it does have a dedicated fan base, like other meme coins, it lacks any real-world value beyond being a vehicle for pure speculation. I can't recommend Shiba Inu or any other meme coin as a serious investment. Today's decline highlights the token's vulnerability to macroeconomic forces.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.