Shiba Inu (SHIB-USD) has been a star among cryptocoins in 2021, thanks in part to Tesla (NASDAQ:TSLA) CEO Elon Musk.
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Musk caused a run on the coin when he tweeted a Chinese poem about two brothers who fight. He then crashed it by admitting he didn’t own any.
The Shiba Inu price reacted like it was touched by electricity, then tased. At one point the market’s value was over $41 billion. By December 21 it was below $2 billion. The coin only began listing at Coinmarketcap in April and its market cap then was $19 million.
Someone made some coin on Elon.
Get Rich Quick
The potential impact of being right on Shiba Inu is something to behold. Someone who put $100 into SHIB at the start of the year would still have a fortune worth $45 million today.
Advocates say there’s more here than Musk. There’s a new exchange called Shibaswap that takes Shiba Inu coin in exchange for NFTs and other cryptocoins.
Developers gave half their supply to Ethereum (ETH-USD) co-founder Vitaly Buterin, who promptly put 90% of them out of reach. The process is called “burning” and it reduces supply, thus in theory hiking the price.
AMC (NYSE:AMC), which also became a meme star this year, has said it will begin accepting SHIB as payments in the next few months.
The creator of Shiba Inu, who goes by the name Ryoshi, also proposed a low-cost “two-layer” exchange called Shibarium built on top of Ethereum. The blockchain will also host a gaming network called Oshiverse that, presumably, gives coin owners something to buy.
Finally, there’s a move to list Shiba Inu coins on Robinhood (NASDAQ:HOOD). Supposedly there were 450,000 signatures supporting the listing. That would benefit the estimated 925,000 wallets holding it, according to Etherscan.
Since its sudden rise, however, Shiba Inu has been falling fast. There are good reasons for this, too.
One comes from AsktheDr, a Twitter handle tied to a telehealth company. The company tweeted December 19 they was holding SHIB coins.
Since then, the company has not only sold out of SHIB but sued community leader Shytoshi Kusama, calling the whole thing a scam. AsktheDr even re-tweeted a video from trader Anthony Pompliano in October, making a similar accusation. The “fans” of the coin flooding the online world may all be bots, critics charge.
Liar’s Poker
Shiba Inu, and many other coins, live in a shadowy world of profit, loss, rumor and lies. As our Faisal Humayun notes, if only half of all people trust their governments, the backers of “fiat” currency, there’s a lot of room for alternatives to run. You can also get burned on fiat, as any Turk will tell you.
The Oshiverse announcement could make Shiba Inu a metaverse play and increase its value, as our Brendan Rearick reported on December 10. It would give SHIB owners something to buy and something to burn their coins on.
But who are the sources on this? Are they real? Where is their money? These are questions I ask when examining any asset. They’re questions I can’t answer regarding Shiba Inu.
I know who Elon Musk is, and besides being fabulously wealthy he’s a trickster. He likes to play jokes on the get-rich-quick crowd. The people backing SHIB, sit behind desks with computerized balances. They have never put a cot inside a factory to scale production of a car or a rocket ship.
The Bottom Line on Shiba Inu
I put my money in real things, in real companies with real sales and, sometimes, real earnings.
Occasionally I get burned, as I have been this year on Alibaba Group Holding (NASDAQ:BABA), but there is a there, there.
There is nothing real in $SHIB. You can’t build a factory with it. It’s all hype and tweets, gambling and NFTs. Even if you win on it, I think you’re a loser.
InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Dana Blankenhorn held a long position in BABA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
