Shiba Inu Surpasses 1 Million Wallet Holders But It's Down 50% From Its Peak. Is It a Buy?
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Shiba Inu -- the underdog to Dogecoin -- is advancing in adoption but declining in price. If you buy now, don't expect huge gains.
Key points
- The number of Shiba Inu token holders has surpassed 1 million, that's a significant advance in adoption for the meme coin.
- However, it's currently trading at more than 50% off its peak.
- Proceed with caution as it's unlikely to see 100x gains again anytime soon (we'll explain why), and its official Twitter handle issued a scam warning.
You've got to give it to the owners of Shiba Inu (SHIB) tokens, they are a scrappy, loyal bunch. Last week, the feisty fido meme token that's nipping at Dogecoin's heels surpassed a major adoption milestone of 1 million wallet holders of its dog-themed cryptocurrency, according to the official Certik audit posted on the Shiba token website.
Meme coins Shiba Inu, Dogecoin, and Floki Inu are in the doghouse
Yet, despite that adoption achievement, the so-called "Dogecoin killer" has been doggin it lately regarding its price action. In fact, at the time of writing SHIB was trading at $0.0000445, which is a 51% decline from its all-time high of $0.0000879 posted on Oct. 27, while it's down 2.34% during the past 24 hours.
However, SHIB is not the only meme coin in the pricing doghouse. The original top dog meme, Dogecoin, is down 3.13% and upstart meme coin, Floki Inu, is down 2.24% over the last day, marking double-digit declines off their respective tops as well.
Some may see these discounts as prime entry points to load up on these various digital assets, and that could be the case, but don't expect a 100x return on that investment for either Dogecoin or Shiba Inu in the near term. Here's why.
High market capitalization is great but it hinders x-factor gains
Even though Shiba and Doge are priced extremely low -- Shiba Inu is less than a hundredth of a penny per token while Doge is hovering around $0.25 each -- both of their respective market caps are astronomically high right now.
Market capitalization is extremely important regarding the pump-up potential of any asset as it's calculated by multiplying the total circulating supply by its current unit price. That math function generates the market cap.
According to CoinMarketCap, within the total crypto space, Doge is ranked 11th with a market cap of $29.4 billion while Shiba is ranked 12th with a market cap of $24.3 billion.
For either of those coins to realize a 100x gain right now, based on the current supply of tokens, they would have to increase 100 times in price, which would push their respective total market valuations to nearly $3 trillion for Dogecoin, and $2.5 trillion for Shiba Inu, respectively.
Shiba Inu and Dogecoin are victims of their success
When you consider that the current market capitalization for the entirety of available cryptos -- including Shiba and Doge -- is $2.6 trillion, there is simply no possible way for either of those scenarios to pan out in the near future. It's not fear, uncertainty, or doubt, it's just math.
If the crypto miners for these respective projects flood the space with Doge and/or Shiba to try and goose the price, the excess supply actually drives prices down.
The only other solution would be to somehow drastically limit mining going forward and dramatically shrink current supply -- much more than the $6 billion SHIB that Ethereum co-founder Vitalek Buterin burned when Shiba developers sent him half of the total supply back in May as a publicity stunt.
It's simply not possible no matter how many dog soldiers join the self-named "Shiba Army."
Buyer beware -- a new Shiba scam is circulating
To continue sustained growth, both tokens need to offer sustained use cases and programming development to compete with the increasing utility from other projects that provide many benefits such as gaming, NFTs, lending, yield farming, and more.
Additionally, Shiba's official Twitter account issued a warning today about a scam targeting holders of the token.
"We've been made aware of a recent scam traveling social media and other communication platforms. A fake SHIBA Telegram group is being shared across social media," according to a written statement published on the account.
"The scammers impersonate official accounts and create fake users. There is no 'SHIBA BREAKING NEWS! BIG EVENT!' There is no SHIBA airdrop! There is no SHIBA bonus! There is no SHIBA giveaway! There is no SHIBA gift globally!"
So demonstrate dogged determination and vigilance investing in any dog-themed project, understanding you may make a few bones with them but not "best in show" riches in the short run.
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