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Shiba Inu Is Sinking Today -- Is the Cryptocurrency a Buy Right Now?
Key Points
Shiba Inu (CRYPTO: SHIB) is moving lower on Thursday. The cryptocurrency was down 7.3% over the past 24 hours of trading as of 5:15 p.m. ET -- a stretch that also saw Bitcoin fall 3.9% and Ethereum fall 4.4%.
Shiba Inu is seeing a valuation contraction today as a result of the latest Producer Price Index (PPI) report from the Bureau of Labor Statistics (BLS). PPI tracking showed inflation of 3.7% in July -- a level that came in substantially higher than the 3% range that economists had been expecting. Core PPI, which backs out the food and energy categories, increased at a 0.9% sequential monthly rate, the highest jump seen since 2022.
The latest inflation report is making investors think that the Federal Reserve could deliver fewer interest rate cuts this year than previously anticipated. And that's prompting some significant pullbacks for Shiba Inu and other cryptocurrencies.
Image source: Getty Images. ## Is Shiba Inu a buy right now?
While Shiba Inu does have some development network and metaverse projects that could help strengthen its valuation case, the cryptocurrency is still a meme coin first and foremost. Along those lines, momentum for the broader cryptocurrency space and investor appetite for risky, speculative investments are two of the biggest factors that drive its valuation moves. Interest rate policy has historically been one of the biggest catalysts in that regard, with lower rates typically being far better for the crypto market.
Investors are still betting that the Federal Reserve will cut interest rates at its meeting next month, but a cut could come in lower than some investors are hoping, even if one does arrive. Additionally, rising inflation raises the possibility that other rate cuts may be pushed further out. With some signs that inflationary pressures caused by tariffs may be arriving after taking longer than expected to show up in the economy, investors may want to hold off on buying Shiba Inu right now and focus instead on backing cryptocurrencies and stocks with more solid fundamental valuation cases.
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Keith Noonan 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.
Shiba Inu Is Sinking Today -- Is the Cryptocurrency a Buy Right Now? was originally published by The Motley Fool
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