In the past month, almost all cryptocurrencies have seen short periods of rallying and reaching new heights. This has come out of new developments and changes in the sentiments for cryptocurrencies. Bitcoin (BTC) has rallied followed by an announcement of new mining hardware under development, rallying many others along with it including Ethereum (ETH). Among all this, a meme coin nade Shiba Inu found new footings in the crypto world.
A tweet by Elon Musk showed a picture of his new pet dog, Floki, of the same breed as the mascot of Dogecoin and Shiba Inu. This triggered a trend in the cryptocurrency market rallying Shiba Inu (SHIB) to a more than 275% rise. And the trend itself was not limited to SHIB but extended to many such meme coins and altcoins with ‘Inu’ in their name, some of whom saw a rise of as much as 500%. This also put SHIB among the top 20 cryptocurrencies in the world and integration by major crypto exchanges into their platforms. A prominent example of a major cascade effect of crypto influencer and their penetration of the crypto markets.
The Story Behind the Story
“However, the story behind the sudden rise of Shiba Inu is much deeper than it looks at the surface,” said Dev Sharma, CEO of Blockwiz, a global crypto marketing agency. “Cryptocurrency markets work quite a lot like traditional stock markets. SHIB came out as a meme coin with no intended use case. However, the developers and community around Shiba Inu launched their decentralized exchange in the July of 2021. Plus an earlier bull-run also put SHIB on the radar and many prominent exchanges added it to their catalog. It is this accessibility and liquidity that essentially backed the recent uproar of the token.”
Ever since its debut in August 2020, the value of SHIB has grown by more than 5,130,000%. It has also inspired many meme coins and projects. Shiba Inu community is also looking into expanding the horizons of the ecosystem to NFTs, crypto gaming, and other lucrative opportunities in the blockchain market. However, the recent hype is not the real measure of the token’s strength but a trend triggered by non-market influences. Bitcoin – BTC has also seen many phases of such hype but actually fell back by almost 80% in three of those instances.
What Markets Do!
“Markets have a tendency to correct themselves and normalize. The rise of SHIB has a good chance of a substantial decline in near future. However, the launch of ShibaSwap, the decentralized exchange for SHIB with options for staking plus many other integrations points to steady growth for the token after the normalization. For traders, the hype was the opportunity to profit from but as the token establishes itself in the market, it can be a great opportunity for investors as well. If you intend to invest in tokens like these, it is important to study their development prospects first before making the investments.” added Mr. Sharma of the Canadian marketing agency.
The current average ‘hodling’ period of SHIB is around a week, which is low pointing to high volatility in the market. There’s also the risk of large investors moving the market as the capitalization is low for these tokens. Thus, factors like the hodling period, exchange integration, liquidity backing, application, acceptance, etc. should be kept in mind to study the real prospect of smaller tokens.
Ethereum is expected to launch Ethereum 2.0 which will improve transaction speeds and decrease gas fees, plus the NFT ecosystem is going strong on Ethereum protocols. This makes ETH one of the most stable tokens to invest in for the long run. Similar prospects back the stability of many other assets on the blockchain technology like Bitcoin, Solana, Polygon, etc. Even institutional investors are starting to take cryptocurrencies as a lucrative asset class to invest in.
The future certainly has cryptocurrencies as part of our lives. Shiba Inu may just have secured its place among those too but we are yet to see the effects of the market correcting itself. However, investing in cryptocurrency is certainly a lucrative opportunity, now more than ever. Just remember, research, analyze, and then invest.