Cryptocurrency has officially gone to the dogs
SILVER SPRING, MD – Cryptocurrency has officially gone the dogs.
The recent trading frenzy over a digital token called the Shiba Inu – commonly billed as a “meme” or joke coin – has propelled the canine-themed cryptocurrency into the top ten most valuable digital assets by market cap , has reached $40 billion and surpassed its cousin. Clear inspiration, Dogecoin.
Shiba was up another 10% on Monday afternoon and has doubled in value over the past week. Much of that gain came in the flurry of trading last Wednesday, when it rose 66%.
Even with the recent meteoric rise – it is up almost 900% in the past month – each Shiba coin is worth only a tiny fraction of a cent. If you bought $1,000 worth of shiba at the end of September, your 20 million coins would now be worth about $9,000.
Like most cryptocurrencies, Shiba is not typically used for commercial transactions and is considered a high risk, speculative bet by most experts and investors due to the widespread volatility of the crypto market. Experts warn that investors need to be cautious about investing money in anonymised ledgers that have little functional use.
Lee Rainers, an outspoken crypto skeptic, teaches fintech and cryptocurrency courses at Duke University School of Law. Reiners said he is not surprised by Sheba’s recent spike.
“This is when you have massive speculation in assets with no intrinsic value,” Reiners said.
Investors may be thinking that this story sounds familiar. Bitcoin has doubled in value twice this year – with a sharp drop in the middle – and now sells for over $60,000 per coin. Among shares, Shiba’s rivals in GameStop had risen, rising from about $17 per share in early January to $483 later that month. Recently, it has been trading consistently around $180.
While Shiba is the current white-hot cryptocurrency, you cannot trade it through more traditional brokers – yet. A petition on Change.org with over 450,000 signatures is pushing for mobile trading app Robinhood to start allowing Shiba trades. Robinhood currently allows trading of Dogecoin and other cryptocurrencies. Its CEO Vladimir Tenev told investors last week that the company will “carefully evaluate whether we can add new coins that are safe for customers and in line with regulatory requirements.”
Strong regulation of crypto markets seems inevitable, but it is unclear when this might happen. Gary Gensler, chairman of the US Securities and Exchange Commission, said in August that the crypto world does not have enough investor protections and compared it to the “Wild West”.
It is unclear whether a lack of regulation is driving the recent spikes in Shiba and other digital assets. What seems clear, though, is that retail investors – the smaller ones – are on the move.
On that busy Wednesday, Shiba had an average trade size of $115, said Kyle Waters, a research analyst at blockchain data and analytics firm Coin Metrics. Waters said that it is “highly suggestive” that the typical Shiba trader on Coinbase is a small retailer.
Shiba’s rise is similar to Dogecoin’s ascent in the spring, when a fire broke out between April 7 and May 7 and rose from about 5 cents to 57 cents.
Like many other cryptocurrencies, Shiba is shrouded in mystery. According to its white paper – or “Woof Paper”, in this case – the token was launched in 2020 by an anonymous individual or group named “Ryoshi”. The paper, which describes how Shiba and her descendants operate, is also filled with growing-but-vague musings about community, freedom, revolution, and destroying traditional patterns.
A person with limited background knowledge of technology and blockchain vernacular will be hard pressed to understand most of the technical terms in the white paper.