SHIB-USD: Shiba Inu Truly Does Have a Mind of Its Own


For years, cryptocurrency advocates have pushed for mainstream acceptance and integration of Bitcoin (CCC:BTC-USD) and other digital assets. I think it’s safe to say that despite vocal criticism of this burgeoning investment category, disapproving overtures are fading into the background. And the widespread popularity of Shiba Inu (CCC:SHIB-USD) is evidence.

A smiling Shiba Inu dog in front of a bright yellow background.

Source: Shutterstock

Let’s be real — who would buy this junk in any other time, in any other circumstance?

No, whatever your personal thoughts about cryptos, the sector is more than likely here to stay. It’s not just about its rampant popularity nor the fact that mainstream business outlets frequently keep tabs on the Bitcoin price. Rather, we’re living in a paradigm where a sovereign nation — in this case, El Salvador — has recognized Bitcoin as legal tender.

Therefore, it’s no longer a question about whether or not Bitcoin has arrived. Frankly, when it first hit five digits in the magical rally of 2017, BTC’s integration was an inevitability. We just needed some time to recognize its potential. Of course, what’s good for Bitcoin happens to be just as well for altcoins, even the questionable ones like Shiba Inu.

But there’s one aspect that has long bothered crypto investors: the stark correlation. In other words, wherever Bitcoin goes, so too do other crypto coins. At first glance, this correlation is comforting. I highly doubt that many people would gamble on Shiba Inu if BTC didn’t prove the viability of a decentralized economy.

However, for virtual currencies to truly mature, they must at some point disassociate from Bitcoin and trade on their own fundamentals, whatever those fundamentals may be. Can you imagine if the entire S&P 500 index ebbed and flowed on the basis of one stock?

Dissociation Cometh But to Shiba Inu

Over the past few weeks, I’ve been talking about Shiba Inu on what you might consider an alarming frequency. By the way, you should get used to it — SHIB-USD is hot and I’m only happy to oblige, free market capitalism and all that sweet jazz.

Anyway, one of the points that I made — and something that my colleague Will Ashworth mentioned — was that Shiba Inu is basically a blue-collar crypto. Whereas institutional investors have graced Bitcoin into the holdings of their billion-dollar portfolios, SHIB-USD is largely the domain of regular folks with nine-to-five jobs.

Thus, Ashworth agreed with my argument that “Shiba Inu has become a cryptocurrency for weekend warriors who don’t have time during the workweek to speculate on SHIB-USD and other low-priced cryptos.”

I’m on record as stating that I’m not interested (at least not of this writing) in buying SHIB. But having done more research into the topic, I must admit that there’s one attribute that Shiba Inu has that few (if any) cryptos can claim: it’s disassociated from Bitcoin’s pricing dynamics.

From April 14 (roughly the time when SHIB’s pricing catalyzed from investor sentiment) through Sept. 24, the altcoin has a negative 10% correlation coefficient with Bitcoin. This is significant for two reasons:

  • A coefficient that small implies no statistically significant relationship.
  • If there was a longer-term relationship, so far, it’s pointing in the inverse direction.

Put another way, Shiba Inu is doing its own thing — sort of like the canine from which the meme coin gains its inspiration. While this dynamic may be annoying for pet parents, it’s a positive attribute for those who want to profit from cryptos, even if the fundamentals for Bitcoin specifically look poor.

Time to Get Lucky?

Cryptos have changed my life, with the most obvious example being that I no longer have house payments. But I’m also glad that Ashworth reiterated how good fortune — as opposed to a deliberate analytical method — was ultimately responsible for my blessed state:

There aren’t many bigger achievements in a regular person’s life than paying off their mortgage early. I continue to shake my head in amazement. But as (Josh) Enomoto freely admits, he was simply lucky.

I am extraordinarily fortunate — a true “thank you, Jesus!” moment. Right place, right time and nothing more than that.

The thing is, if you’re looking to get rich off Bitcoin today, you might be barking up the wrong tree. BTC is now in the hands of the institutions and thus is subject to institutional rules and whims.

Shiba Inu? It’s not the suits that are buying this token but the guy cutting your grass. (And, yes, I am familiar with the strip club scene from “The Big Short”) And that admittedly has serious appeal because you’re banking on the psychology of hopes and dreams rather than the cold, calculated algorithms of high-frequency trading.

For those who want to take a shot with SHIB, I wish you the best of luck. But please, gamble responsibly.

On the date of publication, Josh Enomoto held a LONG position in BTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.



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