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Shiba Inu, founded in 2020, is a play on another meme cryptocurrency called Dogecoin.
Igorigorevich/Dreamstime.com
Shiba Inu,
a cryptocurrency that is essentially based on a meme of a meme, has soared over the past few days. The joke crypto may just get the last laugh.
The price of Shiba Inu has jumped almost 25% since late Tuesday, from about ten-ten-thousandths of a cent per token to more than twelve-ten-thousandths of a cent, bringing year-to-date gains to upward of 50%. The rally has also carried fellow dog-meme-themed
Dogecoin
up about 8%, with both outperforming
Bitcoin,
the largest crypto, which is flat over the same period.
Shiba Inu is a so-called memecoin—initially started as an internet joke as opposed to a significant blockchain project, like Bitcoin or Ethereum.
Founded in August 2020, Shiba Inu references another memecoin, Dogecoin, which is itself a reference to an internet meme involving a Shiba Inu dog, jokingly called “doge.” It’s almost as complicated as blockchain technology.
But Shiba Inu—already the 13th-largest crypto, with a near $7 billion market capitalization—may be getting more serious. This time, traders may not be piling into the coin just because of memes.
Shiba Inu developers revealed plans for the “Shibarium” this week, detailing plans to launch a layer-2 blockchain—one that sits atop another network, in this case Ethereum—that will dramatically build out the Shiba Inu ecosystem. Shiba Inu, alongside its peer coins in the Shib universe called Bone and Leash, already sit atop the network underpinning Ether, the second-largest digital asset.
“We are approaching the finishing touches for Shibarium’s Beta and its imminent launch,” the developers wrote in a blog post. “Patience is key, and some see Shibarium as a price pumping tool, but that is not the project’s focus and never has been.”
The Shibarium will use Shiba Inu, Bone, and Leash in protocols that serve the metaverse, gaming, and Web3, the developers said. In particular, Bone will be the network’s “native token,” used to pay for transactions on the blockchain.
Should Shibarium take off, it is likely to support Shiba Inu prices, because the network will introduce a mechanism to burn a certain amount of Shiba Inu tokens for each blockchain transaction. Burning tokens takes them out of circulation, and is the crypto equivalent of a stock buyback.
There are likely multiple factors supporting Shiba Inu’s pump higher, according to analysts, including an overall lack of liquidity amid high volumes—with few sellers to meet demand—and a general wave of optimism across crypto.
“The risk-on reversal we’ve seen to start the year has benefited some metaverse token prices,” said analysts at crypto data provider Kaiko in a series of Twitter posts. That may have fed into the narrative around Shibarium and its support for the metaverse. Indeed, Decentraland—a browser-based virtual world platform—and its MANA cryptocurrency are up 130% in 2023 alone.
“As long as volumes are supportive, riskier tokens like Shiba Inu, Dogecoin and Decentraland could catch a bid from retail looking to take part in a market rally,” the team at Kaiko wrote. “Bitcoin volumes have hit their highest level since the FTX collapse, a sign that investors are returning to crypto markets.”
Write to Jack Denton at jack.denton@barrons.com
