Riding the meme-stock craze that lifted stocks like AMC Entertainment and GameStop to new heights, Shiba Inu (CRYPTO: SHIB) burst onto the scene in 2021. And as of Jan. 24, the dog-inspired cryptocurrency token is the 14th most valuable cryptocurrency in the world, with a market capitalization of $12 billion.

Is Shiba Inu a good investment in 2022? Let's look at both the arguments for and against the cryptocurrency to find out.

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Shiba Inu's positive characteristics

Unlike its rival meme coin, Dogecoin, which was created as a fun carbon copy of Bitcoin, Shiba Inu supports the use of smart contracts. These are self-executing computer programs that increase the functionality of the network. Shiba Inu is built on top of Ethereum's (CRYPTO: ETH) blockchain, taking advantage of that cryptocurrency's infrastructure and security features.

Shiba Inu's native token, SHIB, is listed on a number of popular exchanges, including Coinbase, Binance, Crypto.com, FTX, and Gemini. This accessibility is a big reason for the sustained engagement of Shiba Inu's community of investors, known as ShibArmy. The cryptocurrency has even attracted the attention of Tesla CEO Elon Musk.

When it comes to utility, Shiba Inu does have some potential catalysts. However, because the token is built on top of Ethereum, it is also subject to Ethereum's network congestion and high fees. The solution is to build a layer-2 blockchain, called Shibarium, to raise capacity, lower fees, and speed up transactions. The update has yet to be released, but it could be a major selling point for developers of decentralized applications (dApps), specifically for non-fungible tokens and gaming use cases, to work on Shiba Inu's blockchain.

Another huge event that could boost Shiba Inu's price is the possibility of a listing on the Robinhood app. Robinhood's user base skews young and was very vocal during the meme-stock mania last summer -- the exact type of customers who often are interested in investing in Shiba Inu. If this were to happen, it would certainly add a large pool of buyers, supporting Shiba Inu's price at least in the short term.

Here's why you should stay away

If you were lucky (and bold) enough to buy Shiba Inu at the beginning of 2021, you'd be sitting on some life-changing gains right now. But a repeat of this performance is highly unlikely. That's because Shiba Inu has no meaningful competitive edge in the world of cryptocurrencies, and thus its long-term viability is extremely questionable.

From a developer's perspective, blockchains such as Ethereum itself, or Cardano and Solana, have better attributes, longer operating histories, and more promising futures. And developers are what will drive the ultimate success of the network with their ability to build dApps to draw in users. In my opinion, Cardano and Solana are better projects to invest in.

Additionally, just over 600 businesses accept payment in SHIB, a tiny number in the massive retail world. These merchants might simply be accepting this crypto as a publicity stunt to attract customers. I don't really see this trend continuing, nor do I see consumers deciding to use SHIB for transactions.

A solid long-term investing strategy can't be one built on speculation, which is what you'd be doing if you decided to buy Shiba Inu today. The coin's price is driven by the hype on social media, something that really can't be predicted at all. Furthermore, there are nearly 549 trillion Shiba Inu tokens in circulation right now. Another large-scale burning of existing supply -- like what Ethereum co-founder Vitalik Buterin did last year, which helped Shiba Inu's price surge -- does not look likely.

Although Shiba Inu is down 76% (as of Jan. 25) since its peak in late October, I still think investors should stay away from this meme token.

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Neil Patel owns Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool owns and recommends Bitcoin, Coinbase Global, Inc., Ethereum, and Tesla. The Motley Fool has a disclosure policy.