Who’s laughing at Shiba Inu now? A look into how the coin soared past Bitcoin as the most viewed crypto
In 2021, the Shiba Inu token soared ahead of BitCoin as the most popular cryptocurrency. How did a memecoin achieve this feat and what does it tell us about the cryptocurrency market?
The Shiba Inu (SHIB) token gained massive popularity in 2021, eventually becoming the 13th largest token by market capitalization. It recently outdid the crypto behemoth Bitcoin in terms of popularity, getting 43 million more views than BTC as per coinmarketcap, and becoming the most talked about crypto asset on twitter, hijacking over 22% of the share of crypto discussions on the platform. It even momentarily surpassed DOGE, the memecoin it was inspired from, in terms of market capitalization. How did an absurd token which was launched as a joke become bigger than well researched cryptocurrency projects, and what does its popularity indicate about the cryptocurrency market?
Gen Z humor is rooted in irony. The juxtapositioning of lighthearted, often nonsensical subjects in contexts that are otherwise considered serious, complex or formal, has shown to trigger Gen Z’s sense of humor better than anything else. At first glance, the rise of SHIB can be seen as a continuation of this trend. For a generation that finds meaningful expression in choosing to not take itself too seriously, the sudden popularity of memecoins seems like an obvious outcome.
However, this is not to say that GenZ does not understand or respect the complexity of the cryptocurrency market. If we take a closer look at the journey of the SHIB token , we find that much of its popularity is due to the marketing it received from crypto influencers on Twitter. Like any other type of speculative investment, a lot of weight is placed by GenZ on the opinions of people who are seen as masters of the crypto market. A single tweet from a crypto influencer has the power to raise or dwindle the popularity of a coin manifold. Due to the complex nature of crypto, people who disseminate useful information which simplifies the market and the technology it runs on are revered in the cryptoverse. Their opinions can make or break a crypto asset’s future. Two such highly regarded figures in the cryptoverse are Elon Musk - the CEO of Tesla, and Vitalik Buterin - one of the founders of Ethereum.
After the anonymous Ryoshi launched the Shiba Inu coin, he sent half of its total supply to Buterin. A rightfully confused Buterin went on to donate $1 billion USD worth of these SHIB tokens to COVID support ventures in India. He burned close to 90% of the remaining store of his SHIB tokens by transferring them to an inaccessible wallet. Buterin’s actions generated a lot of talk in the cryptoverse about this strange new memecoin , which is what many people speculate as the very intention behind Ryoshi’s grant to Buterin. The anonymous founder Ryoshi, this mysterious transfer of such a large amount of SHIB to an influential crypto figure, and the obvious roots of the SHIB token in GenZ meme and internet culture created an air of notoriety surrounding the token in the crypto community. Elon Musk also began to make positive predictions regarding the future of SHIB in various tweets, showing continuous support for the rise of the token. Having received attention from two of the biggest figures in the cryptoverse, the value of SHIB quickly skyrocketed.
Moreover, SHIB was a self proclaimed “DOGE killer”. Since its launch, SHIB has given tough competition to DOGE , another memecoin which was catapulted to the top of the list of mainstream cryptocurrencies due to Elon Musk’s public support. Unlike DOGE , which has its own blockchain (and all the issues that come from having to maintain, develop and scale an independent blockchain) , SHIB is based on Ethereum’s highly advanced blockchain technology. This makes SHIB a token which can support smart contracts, and DeFi activities. The use cases for SHIB are much more fluid and flexible. The Shiba Inu ecosystem - which consists of three different tokens, namely the SHIB , LEASH and BONE, has also recently begun to issue Non Fungible Tokens called Shiboshis on its decentralized exchange known as the ShibaSwap. All these factors , along with cryptic tweets by Elon Musk indicating his shifting support from DOGE to SHIB, had momentarily catapulted SHIB ahead of DOGE in terms of market cap, making it one of the top ten largest crypto currencies of the time. It saw as much as an astounding 777% growth in 30 days. There was a petition which garnered massive support , urging Robinhood to list SHIB on its exchange.
The value of memecoins including SHIB and DOGE have dropped since the initial hype. SHIB’s market cap has reduced significantly from $40 Billion to $15bn. SHIB, however, continues to be one of the largest cryptocurrencies today. The high volatility of memecoins and shitcoins compels any investor to do thorough research on them before investing. Since the value of these coins is directly proportional to the hype surrounding them, often generated by crypto influencers and the popularity and relevance of the icons and memes they are based on, it is wise to invest in shitcoins when there is a lot of conversation going on about them in crypto circles and if popular personalities in crypto are in favor of them. Once the conversations seem to be dying down , and the joke a shitcoin is based on starts to become old and lose its relevance, it is almost certain that its value will see a downturn and investors will begin to sell their holdings before the price dips too low.
If a new crypto token seems to derive its entire value from the conversations and speculations surrounding its existence , rather than its utility features and the soundness and technological excellence of its whitepaper, it is safe to assume that such a project does not enjoy longevity and would not be considered as a stable investment option. Depending on your long term objectives from your investments, you might choose to buy Shitcoins, especially SHIB due to its extremely low cost and the possibility to make a quick buck, if that is what you are looking for. However, if you wish to earn stable profits from your crypto investments, it is better to look at crypto projects with well defined functionalities which have known and trusted founders and developers behind them. The goals of good crypto projects are usually listed clearly along with a comprehensive plan to achieve them. Unlike coins like SHIB and DOGE , which usually have a few whale investors , stable crypto currencies have more than 300 investors.
Despite the above mentioned concerns, SHIB cannot be completely cast aside as a shitcoin with no intrinsic value or future. SHIB has commendable utility features due to its roots in the Ethereum blockchain. It also enjoys high liquidity and continuously announces plans to expand and develop its ecosystem further. Its low cost has made it a low risk investment option which is accessible to novice traders as well as experts. As with any other crypto asset , SHIB deserves an unbiased moment of consideration as a viable investment option.
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