Since the outbreak of the global COVID-19 pandemic in March 2020, it can be said that no asset class has become more popular than cryptocurrency. In the past 21 months, the total market value of the cryptocurrency has soared by more than 1500%, reaching approximately $2.2 trillion.
When it comes to cryptocurrencies, people often think of Bitcoin and Ethereum at first. After all, the market value of these two cryptocurrencies accounts for nearly 60% of the total market cap.
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We have been looking at the rising trend, and it is worthy to note that the revenue brought by the “meme” coin Shiba Inu may rank first in 2021.
The Rise In Market Value of Shiba Inu Coin
A cryptocurrency investor bought $8000 worth of Shiba Inu coin last year, which has now become approximately $5.7 billion.
According to the relevant encrypted wallet data, these transactions began in August 2020, when the investor bought approximately 70 trillion Shiba Inu coins.
Shiba Inu coins began trading on August 1, 2020. On that same day, the investor whom we will refer to as investor X made his first purchase and bought 70 billion Shiba Inu coins.
According to CoinMarketCap, the encrypted wallet currently has more than 13% of the total supply of Shiba Inu coins, and the total circulating supply of Shiba Inu coins is 549 trillion.
It remains to be seen whether Investor X can monetize his Shiba Inu coins without allowing the price to fall, while he still holds these Shiba Inu coins.
In any case, it may take some time to liquidate these assets. The Coinbase platform where the wallet is located has a withdrawal limit of $50000 per day. So it will take 114,000 days to withdraw the money, which is approximately 312 years.
The reality is that investor X transferred 40 trillion of his Shiba Inu coins to four different wallets. We suspect that this may be a prelude to monetization, and the price of Shiba Inu coins will fall sharply.
Financial analyst Jacob Oracle said on Twitter: “if he decides to sell these coins, SHIB will plunge 99.99% to zero.”
Last week, the market value of Shiba Inu coins surpassed that of Dogecoin and became the ninth largest cryptocurrency in the world. However, presently, the market value of Shiba Inu coins has fallen below $30 billion and the ranking has dropped from No. 9 to No. 11.
Risk Analysis of Minority Cryptocurrencies such as Shiba Inu Coins
Dogecoin has always been considered the representative of the “cryptocurrency space zoo” in the industry. At the time of the sharp rise of dogecoins, all kinds of minority cryptocurrencies (also known as “copycat coins”) began to appear frequently in the market, with significant characteristics of a sharp rise and fall.
On November 1, Musk mentioned dogecoin in a tweet, which made the dogecoin rise rapidly by more than 6% in 15 minutes.
Following the dogecoin trend, Shiba Inu coins have also attracted a lot of attention recently. In October 2021, Shiba Inu coins rose by more than 800% in a single month, ranking among the top 10 in cryptocurrency market value.
From the analysis, minority cryptocurrencies with poor liquidity and low price, such as Shiba Inu coins, are more likely to bring capital losses.
Since May 2021, the cryptocurrency space has experienced several blood baths. The top currencies such as Bitcoin and Ethereum once collapsed, which would trigger a big nose dive in the price of other cryptocurrencies. Moving forward to October 2021, the price of the mainstream currencies gradually rebounded, setting a new record, while boosting the transaction price of minority cryptocurrencies.
Among those minority cryptocurrencies, you will find that Shiba Inu coin soared from the opening at $0.000007 to the highest at $0.000086 in October 2021. This mind-blowing rise puts the stats at an increase of nearly 1130%, and finally closed with more than 800%. The market value of Shiba Inu coins also surpassed that of dogecoin and ranked among the top 10 in the market value of cryptocurrency.
On November 1, the price of Shiba Inu continued to rise. As of 17:15 on November 1, Shiba Inu’s price was reported to be at $0.0000734, with a 24-hour increase of 13.2% and a market value of more than $28 billion.
There has been frequent news about trading Shiba Inu coins on overseas exchanges, the launch of relevant NFT works, and the acceptance of Shiba Inu coins as a payment option but all these are part of the buzz around Shiba Inu
The buzz around Shiba Inu has triggered more conversations. Many people in the industry believe that currencies such as Shiba Inu are “air coins” and do not have practical significance or use cases. They also believe that market sentiment is irrational, and it causes price bubbles to intensify.
Current Situation of Shiba Inu Coins
According to the statistics of Coinmarketcap.com, the increase in the price of Shiba Inu coins this year has reached 50588941%. This data means that Shiba Inu investors will become millionaires by December 12 after investing $2 at midnight on January 1 this year.
This year’s sharp rise in the price of Shiba Inu coins is the result of the joint action of many factors, including “fear of missing out” (FOMO), the inclusion of Shiba Inu coins in the trading target of many cryptocurrency exchanges, the official launch of decentralized exchange ShibaSwap, and the market’s positive expectations for the future development of cryptocurrencies, such as the launch of layer-2 blockchain project Shibarium and NFT based games.
However, the social media hype around Shiba Inu coins is not consistent with its actual utility value. As a cryptocurrency whose market value occasionally ranks among the top 10 in the world, Shiba Inu coins have little to no utilities. Only 385 merchants in the world accept Shiba Inu coins as a form of payment, of which more than 10% of the “merchants” are cryptocurrency exchanges.
In addition, Shiba Inu coins have no competitive advantage or differentiation. It is an ERC-20 token built on the Ethereum blockchain, which means that it will be affected by the same high transaction cost and processing time lag Ethereum faces. Overall, there are no key factors that help it stand out from more than 15,000 listed cryptocurrencies. Therefore, there is a high probability that the Shiba Inu coins will fall in 2022.
Problems such as high-frequency trading, unclear trading rules, and failure to do a good job of information disclosure in time make cryptocurrencies limited in protecting users’ rights and interests. More users participate in speculation driven by the need to make a profit and so, ignoring all the warning signs.
Minority currencies such as Shiba Inu coins and dogecoins are more likely to be reprinted, overhyped, and abandoned. Once investors buy Shiba Inu coins, bankers create an overhyped atmosphere by means of “market-making”, so as to attract retail investors. Once bankers exit, it is difficult for ordinary users to avoid the risk of capital loss. On the other hand, if users, especially newbies, are intrigued to buy some cryptocurrencies to earn revenue or want to buy a ticket to enter the cryptocurrency space, minority cryptocurrencies such as Shiba Inu coins would be your top priority. Gate.io, as an excellent cryptocurrency exchange, can provide outstanding trading services of high-quality coins.