Diwali, the five-day Indian festival of lights, has arrived, with the most important occasion of “Lakshmi Pujan” – worship of the goddess of wealth and prosperity – falling on Nov. 4. The auspicious day is considered the best time to invest in financial assets and has scores of people purchasing gold and stocks each year.
This time, Indians also appear to be flocking to meme cryptocurrency shiba inu (SHIB), whose current market capitalization of $39.13 billion is bigger than the market value of Indian fast-moving consumer goods giant ITC, auto sector heavyweight Maruti Suzuki and one of the country’s top lenders Axis Bank. According to local observers, the lure of making big money on a relatively small investment is drawing investors from all walks of life to SHIB.
“The SHIB FOMO [fear-of-missing-out] is absolutely real,” said Keshav Aggarwal, a crypto investor and founder of Bitcoin Investor Group, a premium WhatsApp group for crypto traders, exchanges, and crypto project founders. “SHIB is the cheapest and the most hyped (marketed) coin available on Indian exchanges.”
At press time, SHIB was changing hands at rupee (₹) 0.005624 ($0.00007026) on Binance-owned Mumbai-based WazirX exchange. Meanwhile, its rival dogecoin was trading at ₹21 ($0.28) and bitcoin was priced at ₹4,871,529 ($65205).
According to International Monetary Fund estimates, India’s per capita income or the amount of money earned per person in inflation-adjusted terms during 2020-21 is ₹86,659,($1160), or 1.77% of bitcoin’s going price. So, it’s no surprise that SHIB, with its much cheaper valuation, is drawing strong demand in the festive season.
“The motivation to buy SHIB is to earn good profit in a short time,” Dharmesh Barot, a SHIB investor and a real estate professional, told Coindesk. “Yes, it’s cheap money too, easy to bet on.”
SHIB, an ERC-20 token created by an unknown person named Ryoshi in August 2020, has chalked up a near ten-fold rally in the past four weeks, outperforming bitcoin and other major cryptocurrencies by a big margin. Last week, the cryptocurrency briefly replaced its rival dogecoin as the ninth largest digital asset. The team behind SHIB has also launched decentralized exchange ShibaSwap, which allows users to stake coins.
According to Defi Llama, the total value locked in ShibaSwap has doubled to over $500 million in the past four weeks.
The sentiment is quite bullish in the retail crowd, as evidenced by the recent comments in Aggarwal’s WhatsApp group. “DOGE, SHIB ki behen, chacha, fufa koi nikla hai to batao, pura khaandan kharid lenge [let us know if SHIB, DOGE’s sister, uncle, have been launched, we will buy entire family],” one member jokingly said in Hindi, revealing his/her bullish bias on meme coins.
Members of a Telegram-based Shiba Inu India (Official) group have planned a community buying effort at 6:30 PM UTC on Nov. 3 – a day before Lakshmi Pujan. “We can all do this,” said a group member.
“The major motivation is always the money for people,” Rajat Lalwani, Community Admin & Moderator, Growth Breed at SHIB India, told Coindesk in a Telegram chat. “The price is relatively cheap than a lot of coins, and people feel if the zeros keep getting eaten, then they can make 10x, 100x or even 1000x on their investment long term.”
Peak retail interest
Google Trends currently shows a value of 100 for the India search query “SHIB” over the past 12 months – a sign of peak retail interest mostly seen at market tops.
“Cheap price has been the biggest factor, and to see $100 becoming $1000 in no time is driving madness,” Siddharth Menon, co-founder of WazirX, said. “We had seen this with DOGE in 2017, where memes became life-changing for some. I missed out on that hype back then too.” The exchange published a blog post on Nov. 1 explaining how to buy SHIB in India.
Some investors have been drawn to SHIB by dogecoin’s meteoric 15-fold rise to ₹58 in April-May. “The motivation to buy SHIB came when DOGE coin made an immense amount of money and SHIB was coming into the limelight and was being referred to as the DOGE killer. It was then I thought of investing into it,” said Gurpeet Singh, an audio engineer from the Indian state of Punjab.
There is more to it than low price
According to Lalwani, demand for SHIB stems from the community’s active approach in dealing with the excess supply situation.
“In May, Ethereum founder Vitalik Buterin burned 45% of SHIB’s supply to a dead wallet. That started a cult-like revolution of burning tokens to increase the price by decreasing supply,” Lalwani said. “Buterin burned a total of 405 trillion, and the community has burnt close to 6 trillion already.”
Buterin had been given half of SHIB’s total supply in May in a supposed marketing stunt. Coin burn refers to the process of removing tokens from circulation and is the crypto market’s equivalent of a stock buyback.
“I am holding a good quantity of SHIB, more than 200 million, and I am looking to add more in Diwali while the price is ranging,” said Jiren Singh, a 36-year old accounts professional and a member of Shina Inu India (Official) Telegram group said. “Cheap price is indeed a reason, but my primary motivation is its strong community base and token burns.”
A petition at Change.Org urging Shiba Inu to develop a policy to burn a significant amount of the token supply is gaining traction, garnering over 13,000 votes in less than 24 hours.
“The Shiba Inu pricing is aiming for the $1, but when it will reach that threshold exactly is anybody’s guess,” the petition says. “Developing a policy that could burn some Shib’s circulating supply will let Shiba Reduce for example this ten year period to five years.”
Currently, there are 549 trillion SHIB in existence , according to data provided by CoinGecko. That number is significantly higher than bitcoin’s circulating supply of 18.85 million. Assuming the petition is approved, there would still be plenty SHIB in the market relative to other cryptocurrencies, limiting its price prospects. However, Indian investors think otherwise.
“Circulating Supply of SHIB is very less for 1.30 billion Indian SHIB army,” one SHIB fan tweeted.