After gaining 77% in October, the dog coin meme sensation, Shiba Inu, has lost more than 40% of its value. Has the combination of growing too fast and being a meme coin influenced the fall of the Dogecoin Killer ? From Elon Musk’s Twitter to large whales hoarding Shiba Inu, let’s examine what has led to the latest Shiba Inu price crash.
Shiba Inu Price History
October was a month for all meme coin holders to remember, especially if you invested your savings into Shiba INU. The coin which was created as a joke and a spin-off to Dogecoin, was originally termed as the Dogecoin killer. While not many actually expected it to perform very highly, Shiba INU surged by more than 800% in October. It created an all-time-high of $0.00008719 on October 26 and beat any other cryptocurrency’s rises that month, as per Coinmarketcap.
The coin had been trading at low and volatile values since its creation, but quickly became a popular alternative to major coins like Bitcoin and Ethereum, as well as a fresh new follow-up to Dogecoin, through 2020 and into 2021. Its ability to eclipse Dogecoin, has allowed it to receive a lot of popularity and praise, but as for now it has dropped down and is below Dogecoin.
Unlike Bitcoin, which as the world’s most popular and dominant cryptocurrency is less easily swayed by minor news events and market changes, smaller meme coins like Shiba INU have actually enjoyed their success from such news.
What Helped Shiba INU Rise
- Rumoured Coinbase listing
Shiba Inu had been getting a lot of support to be listed on the popular exchange, Coinbase. Coinbase is one of the biggest crypto exchange platforms in the world, so with a huge rise in prices of Shiba, the investors knew that a possible listing would only make the currency available to millions of more potential adopters.
Finally, Coinbase gave in on September 16, as they announced that the dog token would officially be listed on the exchange. So when news came through, it was no surprise that the cryptocurrency enjoyed another huge rally. This led the coin to increase by a whopping 34%. Since then, the Shiba investors have been rallying in attempts to get the coin listed on the popular trading platform Robinhood, which is likely to once again have some sort of effect on the price.
- Elon Musk
Another aspect that played a major role in the rise of Shiba Inu is indeed Elon Musk. The billionaire Tesla owner has never shied away from a tweet or two in support of their rival Dogecoin, but investors interpreted one of Musk’s tweets very differently.
On October 4, the billionaire took to Twitter to share a picture of a new Shiba Inu dog that he had purchased. This was in no way a direct hint that he himself would be buying Shiba, or that he was recommending others to buy the cryptocurrency.
On the same day, the post went viral and the crypto dog coins went into pandemonium. Dogecoin gained 8% in 24 hours, but the biggest jump came for Shiba Inu. It jumped by a crazy 47% in a 24-hour window, reaching a market cap of over $5 billion by doing so.
But, as we have seen in the past, a small Easter egg is all the investors need to pump the meme currency through the roof. In the past, Elon has been responsible for starting huge pumps for Dogecoin with a single tweet.
There was a clear trend forming. Despite the cryptocurrency actually existing on the Ethereum blockchain and even releasing its own sidechain on the network, the coin had only been rising because of external factors that had nothing to do with the success of the coin.
Fortune.com even states that Shiba INU’s inability to separate itself from being a meme coin will eventually end up hurting it even more. As mentioned before, unconfirmed rumours of Robinhood actually helped the coin rise more, as the petition to get Shiba listed on the trading platform crossed 400,000. This in turn led to a speculative rise in the coin. A combination of these same factors that once made the coin go to great heights has ended up being the downfall since a correction was going to come sooner rather than later.
The sheer volume of signatures even led the CEO of Robinhood, Vladimir Tenev to respond to the investors asking for Shiba to be listed. “We carefully evaluate whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements. We feel very, very good about the coins that we’re currently listing on our platform. And for any new coins that we add, we want to feel equally, if not more good.”
Shiba Inu Falls
At the start of November, the coin that was once trading as high as $0.000088, but has now fallen to lower than $0.000050. The descent of Shiba INU began on October 27, which was not long after it had actually overtaken Shiba INU to become the ninth most valuable cryptocurrency in the world. This was the point where the coin had surged by more than 770%, as we started seeing the Dogecoin killer truly embrace its nickname. The market cap of Shiba was as high as $51 billion — a crazy amount for a meme coin, given that it was higher than the value of established businesses like Electronic Arts.
But other than a massive correction which was expected, the fall of the coin can mainly be attributed to the large whales that HODL Shiba Inu. Shiba Inu’s price was always going to be very volatile due to the inequality in wallets that hold the coin. A record 10 wallets were holding around 72% of all the coins in existence and this led to its downfall. The biggest Shiba wallet held around more than 40% of the entire Shiba INU coins in existence, which would have been worth $21 billion at its peak. One of the big wallets had moved around $3 billion in a move to probably divide the amount across different accounts, but this really terrified the investors as people started panic selling.
“It looks like there were four transactions out of that account yesterday, each sending $695 million of SHIB to a different account — so a total of $2.78 billion,” said Tom Robinson, co-founder of Elliptic, a blockchain forensics company, told Bloomberg earlier this week.
Thus, what can be made of Shiba Inu is that its speculative price growth based on rumoured exchange listings, combined with an uncontrollable billionaire and his social media accounts led to its rise and fall.