Elon Musk isn’t the only one who can move crypto prices with a single tweet; it seems his new puppy has the power to send prices soaring as well. Musk’s picture of Floki — his Shiba Inu puppy — is the main reason for Shiba Inu’s (SHIB) recent growth spurt.
Shiba Inu is a breed of dog that inspired a series of popular memes in 2013. These, in turn, inspired the popular meme coin, Dogecoin (DOGE), which inspired a host of imitations, including SHIB. Following Floki’s October 3 appearance on Twitter, the price of SHIB has risen over 300% in the last seven days. This pushed SHIB into the top 20 cryptocurrencies by market cap, according to CoinMarketCap.
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Why is Shiba Inu soaring?
Floki’s picture is certainly the trigger for the recent SHIB buying frenzy. But there are some other factors at play as well.
- The whole crypto market is rallying. Bitcoin (BTC) has risen over 25% in the past seven days, taking it to levels we haven’t seen since April.
- It’s listed on several top cryptocurrency exchanges. Popular exchange Coinbase listed SHIB in mid-September. Other platforms such as Binance.US and Crypto.com also trade SHIB, making it easy for retail investors to buy.
- Shiba Inu launched its own decentralized exchange (DEX), ShibaSwap, in July. DEX’s are peer-to-peer crypto trading platforms where individuals can swap coins without involving a third party.
Another potential factor is that investor interest in Dogecoin seems to have cooled slightly in recent months. DOGE’s performance has been somewhat lackluster, which could be a sign of growing pains, especially as it becomes more mainstream.
Is Shiba Inu the next Dogecoin?
Shiba Inu launched in August 2020 and is one of the many pet coins that attempted to mirror Dogecoin’s extraordinary growth story.
It has slightly more utility than the original Dogecoin. However, this is not difficult since DOGE was created as a joke and had no utility by design. As such, almost anything would be more useful than the original DOGE.
Shiba Inu has its own DEX where users can trade NFTs, stake coins (tie them up to earn interest and contribute to network security), and earn rewards in other ways. Incidentally, Dogecoin has now gained some traction as a form of payment, but that’s another story.
Should you buy SHIB?
Like Dogecoin, some investors may make money by speculating on these meme coins in the short term. People who bought before this week’s dramatic gains will likely be happy with their profits. But a skyrocketing price alone doesn’t necessarily indicate something’s a good investment — especially when the prime reason for that growth is a picture of a puppy on social media.
It’s always important to be cautious about buying a coin that’s just hit an all-time high. And that’s not the only reason to be cautious about SHIB if you’re looking to invest for the long term — here are two other red flags.
- It has an anonymous founder. Whatever the investment, it’s important to know who is in charge and what their background is. That helps you evaluate how well it might handle any challenges and know that your money is in safe hands.
- Their publicity doesn’t always add up. Shiba Inu tried to connect its project with Ethereum (ETH) founder Vitalik Buterin, but that connection doesn’t stand up to scrutiny. The project gave Buterin half the SHIB in circulation in a publicity stunt. But Buterin then destroyed 90% of the SHIB he received and gave the rest to charity.
At a more basic level, when you look at the broader cryptocurrency landscape and see the projects that have real utility and enormous long-term potential, it’s hard to see how Shiba Inu would make the cut.