Shiba: Another joke coin living on Elon Musk mentions in '24
Cem Dilmegani
In the first weeks of October 2021, Shiba Inu coin, nicknamed the Doge Killer, reached a market cap of ~$11B after having dropped to only ~$2B during 2021. Shiba is a decentralized cryptocurrency modeled after the original Dogecoin and took the symbol of the Doge meme. It was launched in August 2020 at a negligible price <$0.00000001 up until April 2021. Compared to other cryptocurrencies, like SafeMoon which is also skyrocketing, Shiba is on Binance, making it easier to buy, sell, and exchange. However, red flags surrounding Shiba coin, such as the anonymity of the founder, its status as a joke coin and the rollercoaster of its price, make it an unstable investment for many.
Before proceeding, please read our disclaimer on investment related articles.
How is Shiba Inu different from other cryptocurrencies?
Shiba coin is similar to other cryptocurrencies as a decentralized and blockchain based cryptocurrency, however, it aims to differentiate itself in the following ways:
Ownership
In Shiba Inu’s white paper, the publisher, with the pseudonym Ryoshi, states that Shiba’s difference from other cryptocurrencies is that it is community-driven. It aims to be a cryptocurrency project with no specified owner, corporate structure or a CEO making decisions for its future. On a high level, it seems similar to bitcoin in this aspect.
Token standard
Shiba is based on the ERC-20 token standard which is popular with ICOs and crowdfunding companies, and allows it to be at a price cheap enough for people to own thousands of Shiba tokens.
Launching price
Compared to its competitor Dogecoin which was launched at $0.002, Shiba Inu was originally launched at <$0.00000001 with a supply limit of one quadrillion tokens in circulation, and now has ±360k community users.
NFT endorsement
Shiba’s Artist Incubator platform invites artists to create NFTs which will be future Shiba products.
How did Shiba coin gain its popularity?
Like all cryptocurrency hypes, Shiba coin gained its popularity through influencers’ relevant and irrelevant mentions and hints about it. In particular Elon Musk and Charles Xue Biqun:
- On May 7th, Elon Musk tweeted that he is looking to buy a Shiba pup.
- On May 14th, he tweeted a clear statement that he is getting a Shiba Inu because, as he claims, resistance is futile.
- Charles Xu Biqun, the Chinese billionaire venture capitalist, mentioned SHIB in multiple posts on Weibo to his more than 11 million followers. On May 8th he stated: Doge No. 2 hits new all-time highs, almighty.
These posts, as well as listing the coin on Chinese exchanges such as Binance, Huobi and OKEx, correlated with the rise of Shiba coin price 300%.
Why did Shiba Inu’s price drop suddenly?
In a surprising move, Shiba Inu developers sent Vitalik Buterin, founder of Ethereum blockchain, half of their owned tokens in hopes that he would keep them, giving the coin more exposure and reducing its volatility. However, Buterin donated 90% of the sent Shiba tokens to an Indian Covid-19 relief fund. This gesture took 40% of Shiba tokens out of circulation. After this, coin’s price dropped ~35%. Soon after, Buterin stated that he plans to donate the remaining 10% to charity organizations.
On the other hand, the rise of the Shiba coin is mostly referred to the popularity of its rival, Dogecoin, which recently took a hit by its most famous supporter, Elon Musk. Crypto traders and enthusiasts were expecting Musk to speak about the promising future of Doge in his appearance in the Saturday Night Live (SNL) which he disregarded, and instead said that Doge is a “hustle” and “created as a joke”, bringing down its value 35% in 24 hours.
Is Shiba Inu a good investment?
It is likely to be a horrible investment unless you want to invest for the short term and benefit from the momentum. Fate of your investment would be in the hands of how many times people use SHIB as a joke on Twitter.
Many red flags surround Shiba coin as a long term investment. For example:
Lack of use cases
It is a joke and its only use cases (e.g. transferring funds) are already covered by hundreds of other coins. Antony Portno, founder of Traders of Crypto, stated: “While Dogecoin has some actual merit as the one ‘fun coin’, Shiba Inu is a far more manipulative and cynical asset.” He added that Shiba has no actual purpose or use cases, and warned investors from investing money in a joke currency they cannot afford to lose.
Volatility
Although Binance listed Shiba in the innovation zone, Binance managers stated that “SHIB is a relatively new token that poses a risk higher than normal and is subject to high volatility”
Anonymous owners
The owner of the Shiba coin platform is an anonymous person that goes by the name “Ryoshi”, and no other team members are known or named.
Experts’ opinions
In an interview with Fortune, Ben Caselin, head of research and strategy at cryptocurrency exchange AAX, stated that “the hype around meme coins such as Shiba is not a financial, but a social phenomenon”
However, given the optimistic state of markets in Q2 2021, there are those saying that even though Shiba is a joke coin, it still has a chance to grow. For example, David Hsiao, CEO of Block Journal, said: “Everybody is talking about it, we might as well buy this sh*tcoin”. This sort of behavior tends to happen more close to the peak of the market before it crashes.
Your guide in investing
To avoid getting scammed, feel free to read helpful tips and information which we compiled in our articles:
- Read before you invest in crypto to avoid scams & pick winners
- Top 10 Best Cryptocurrency Exchange Platforms in 2021
- Cryptocurrency ETFs: Pros, Cons, and Alternatives in 2021
We’ve also investigated other cryptocurrencies which are unlikely to generate significant wealth for their users:
However, there are legitimate efforts to create digital currencies by central banks and governments, such as:
- Central Bank Digital Currency (CBDC): In-Depth Guide in 2021
- Digital Yuan: China’s Attempt to Replace Crypto / USD in 2021
This was our perspective, feel free to let us know what you think in the comments.
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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It looks like a pyramid scheme, but what bothers me is Twitter Blue tick influencers influencing people to buy this. However I know it’s not for long term.
Shiba Inu has plenty of utility and has seen great support. It’s nearing the end of October and it is reaching all time highs and is extremely steady, a dump may occur, yes, but it won’t be long until it jumps back up and and steadily inclines. Shiba can stand on its own, it doesn’t necessarily need hype or Elon Musk to rise, this has already been proven.
Thank you for the comment. We definitely have different criteria for proof though
This aged terribly.
Should be redone by someone who actually does their research 😉
We evaluate investment options for the long term. And long term investment ideas don’t age in a couple months.
Nice article. Shibu inu is one the top digital currencies in the market. Sits in the top 20 currently. (Marketcap)
In 5 years, “blockchain” and digital currency will be part of everyone’s vocabulary.
China recently banned crypto trading and mining ( for about the 10th time)
Today, they announced they have created 20 million digital wallets to introduce the digital yen. Go figure?
As one of great crypto you tubers says: ” your never too late to the game as long as you show up.”
Iam in the game – If I don’t run into you in the game, you can greet me in the endzone.:)
Cem, the coin has risen 28 MILLION percent in one year, please explain how that relates to the article. It continues to grow, even if this crypto hits 1 penny, that will mean a life changing amount of money for MANY people. I understand the risk, but would you risk 100$ for a chance at 100,000$ I think you would. It’s also a great beginners crypto, hopefully this coin makes enough money for those whom have invested so they can take their profits and invest into a more legitimate crypto such as Etherium, even taking all profits into Dogecoin before the year 2022 hits would be an amazing idea. This is not financial advice, just an opinion. Thanks for reading.
“please explain how that relates to the article”: Gambling makes some people rich, too.
Still waiting to see how this article ages…..
I don’t completely disagree however I think you are underestimating how valued Elons opinion is. If he were to say any coin except bitcoin and maybe ethereum was garbage it would take a significant hit regardless of use, utility, or the project’s whitepaper. He may have also denounced DOGE because it simply is not as good of a coin overall as SHIB. Lets also not forget that those of us that were apart of the crypto space a few years ago were told the same types of thing about BTC , and now It is by far the best performing asset across all markets and is often referred to as digital gold. Regardless of how “legitimate” a central bank’s coin is, I would imagine they would have a difficult time within the space. The point of cryptocurrency is to get rid of centralized systems via the blockchain. Centralized systems do not allow outsiders in, regardless of knowledge or skill level. That is a problem for most of the world population. Highly regulated centralized systems, are literally the opposite of what people like about crypto and the blockchains they operate on.
I may be wrong in the long run, but this article is aging poorly in the short term.
Why would you say that? Shiba’s price seems stable to declining which is what we expect joke coins to behave like in the long run
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