Just over a year after launching and declaring itself the “dogecoin killer”, Shiba Inu coin has overtaken its more famous rival to become the world’s most valuable meme coin.
The cryptocurrency is one of several new tokens that use the same dog-themed branding as dogecoin – alongside Floki Inu, Doge Dash and Dogelon Mars – but it is the only one to so far challenge dogecoin. Shiba Inu’s astonishing price gains have seen it grow in value by 750,000 per cent since January 2021, pushing its market cap above $40 billion.
Founded by the pseudonymous Ryoshi in August 2020, Shiba Inu first began to gather momentum and mainstream attention during the crypto rally in the first half of 2021. In May, Ethereum founder Vitalik Buterin donated over $1 billion worth of Shiba Inu (50 trillion SHIB) to the India Covid-Crypto Relief fund, sparking fresh interest and pushing up the price.
Shiba Inu’s fundamentals differ to dogecoin’s, which its creators claim results in greater utility. Dogecoin is a fork of luckycoin, which uses the same underlying blockchain technology as the bitcoin spin-off litecoin. In contrast, Shiba Inu is an Ethereum-based token, which allows it to function as “an experiment in decentralised spontaneous community building”.
Shiba Inu’s backers also claim it is more community driven than its more famous rival, despite recent data suggesting it is not actually ordinary retail investors that are driving the price surge.
Blockchain data firm Nansen found that the recent rally was spurred on by digital addresses labelled “smart money”, which includes traders making more than $100,000 profit, as well as so-called whales making transactions in excess of $1 million.
Investment from whales ultimately helped push Shiba Inu’s market cap above dogecoin’s, but despite this it is unlikely to act as a “killer” to its older rival. Dogecoin counts figures like Elon Musk among its legion of fans, while developers are also working on ways to improve it and make it more suitable for use as an everyday currency.
Rather than harming the fortunes of other cryptocurrencies, Shiba Inu is instead more likely to help them by bringing more interest to the space.
“We should all thank dog coins like SHIB and DOGE,” noted crypto commentator Lark Davis. “They have both brought in so many new investors.”
Shiba Inu now ranks as the ninth most valuable cryptocurrency by market cap, according to CoinMarketCap’s price index, despite each coin being worth only $0.00007. This is because it has a supply of 1 quadrillion coins – by contrast, bitcoin’s supply is capped at 21 million – however, some popular crypto accounts on TikTok and other social media apps have used this seemingly low price as a way of encouraging people to invest.
“Sparked by social media, the Shiba Inu is continuing to soar,” Michael Kamerman, CEO of crypto trading platform Skilling, tells The Independent.
“The cryptocurrency movement is centred around the masses and where they flock for information. As we’ve seen with dogecoin, and now Shiba Inu, tweets control the digital asset’s rise and fall.”
This susceptible nature of meme coins mean investors are advised to research the cryptocurrencies before buying them, while also taking into account their volatility.
“Social media and financial influencers are great in introducing the concept of cryptocurrency, but investors need to recognise the entertainment value that occurs online, and look deeper into crypto themselves before making any decisions,” Mr Kamerman says.
“It’s a high-risk investment and as with any investment, you need to understand what you’re investing in and make a rational, emotionally intelligent decision.”