- The self-proclaimed “dogecoin killer” shiba inu rapidly accumulated a market capitalization of $35 billion.
- The “meme of a meme” cryptocurrency captured the market’s attention, with one investor having made $5.7 billion from a $8,000 bet.
- 2 crypto experts lay out what the rise of shiba inu means for crypto and their outlook for the fourth quarter.
After the approval of the first US bitcoin futures exchange-traded fund, it finally seemed that crypto was on the path to further institutional adoption and greater maturity.
Shiba Inu is a self-proclaimed “dogecoin killer” cryptocurrency that now boasts a market capitalization of $35 billion. This is larger than the marker capitalization of traditional companies like Robinhood.
SHIB is an ERC-20 token on the ethereum blockchain, which means users face high transaction costs to move the token around, which poses a challenge to its long-term use case relative to dogecoin, which is cheap and easy to move. Insider reporter Vicky Huang spoke to three experts who explained the hurdles this poses to shiba inu.
However, in the short-term, it’s been an amazing trade. One person invested $8,000 in the cryptocurrency in August 2020 when it traded around $0.000000000189, is said to have made $5.7 billion. This is a 14-month gain of more than 7 million percent.
This trade is being dubbed as one of the greatest individual ones of all-time. As a comparison point, Deutsche Bank bond trader Greg Lippmann made around $1.5 billion for the firm as part of an intricate “big short” bet against the US housing market in 2008.
But considering the token is a “meme of a meme”, does this put the crypto industry one step back in terms of being taken seriously by the broader investment industry? And what does it mean heading toward the end of this year?
“We do live in a meme economy,”according to Hewie Rattray, a crypto investor who was an early backer of UK-based crypto companies KR1 and Argo Blockchain.
Rattray thinks it’s natural and that these events will continue to occur as people continue to congregate online. He’s even invested dogecoin over the years because of its “OG”status and legacy in the crypto community.
“I think it’s just refreshing when you see something like shiba inu go up, because you realize that it’s not all about the serious tech stuff,” Rattray said. “Some of it’s just fun.”
It also shows the crypto market is a free one, Rattray said. It’s no different to what can happen in the stock market, particularly with penny stocks – those just get less attention, he added.
“For people to basically judge the market based on one or two projects is naive and short sighted,” Rattray said. “I could point you to a bunch of stock-market listed equities, which are unreal valuations for no reason at all, but they get no press because it’s on the stock market.”
Ryan Sheftel, who is the CEO of Steve Cohen-backed quantitative crypto trading firm Radkl, also sees it as positive because this can happen alongside serious conversations around topics like exchange-traded funds.
“Whenever you have innovation and disruption, it’s never a clean line. It doesn’t occur in a methodical, preordained motion, it’s chaotic, and it’s crazy,” Sheftel said. “But what we found over the years it’s best to let innovative people think and flourish and try different things leads to the best outcome.”
It’s not just shiba inu that is surging in price. Ether, ethereum’s native token, has hit all-time highs above $4,600 this week, while bitcoin (BTC) continues to trade just below its all-time high. This has left many wondering if the crypto market will experience another broad rally over the fourth quarter.
In a recent interview with Insider, Charlie Morris, chief investment officer of crypto asset manager ByteTree, highlighted there were strong seasonal factors at play with bitcoin in the fourth quarter.
“Whenever bitcoin has gotten excited, it tends to be in the fourth quarter for whatever reason,” Morris said. “2018 was exceptional, but most years, the fourth quarter is pretty strong and there’s quite strong seasonality around that.”
Rattray is confident that the market will not return to the long “crypto winter” experienced in 2017/2018 where bitcoin dropped more than 60% from all-time highs. He’s now perma-bullish on the industry, as there’s enough institutional backing in the space.
“Somewhere in the next three to six months, I definitely would forecast $100,000 for bitcoin and somewhere between $8,000 and $10,000 for ethereum,” Rattray said.
This aligns with several crypto analysts that have been calling for bitcoin to reach $100,000 by the end of this year. This week Goldman Sachs analysts have said they expect ether to reach $8,000 in the next two months if it continues to track inflation.
“I feel like the industry is at that stage now where it’s a risk-off decision,” Rattray said. “We see extreme growth over the next half a decade or so, and so long as you’re committed and dedicated, I think you’ll reap the rewards.”
Sheftel highlights that ethereum now has a massive network effect in the layer one space and any project launching on ethereum is going to be one step ahead.
At the same time, investors shouldn’t forget other layer ones might offer better solutions for certain use cases.
“I don’t think it ends up ‘winner taking all’ because of this decentralized distributed nature of the way the whole ecosystem is moving,” Sheftel said.