Meme Token Shiba Inu (SHIB) Rallies 400%, Is Currently #20 Crypto Asset
Meme token Shiba Inu (SHIB) has had an impressive few days in the market. The digital asset had been struggling the past couple of months, and (maybe) got some much-needed boost after Dogefather Elon Musk posted another picture of his adopted Shiba Inu, Floki. However, there is an alternative explanation.
Earlier, Musk had posted of his intention to adopt the dog, which had caused the dog-themed coins to go up. True to form, a recent posting of Musk’s pet has once again sent the meme coin community into a frenzy. The majority of the hype focused on Dogecoin’s rival Shiba Inu, which caused the value of the token to surge in a matter of hours.
SHIB Rally
Shiba Inu rallied 30% after the tweet. This continued on for the following day, pushing the altcoin up an enormous 400%. With a circulating volume of 394 trillion coins, SHIB’s new price point put its market cap at $10 billion. At teh time of writing SHIB is the 20th largest cryptocurrency by market cap.
Shiba Inu is one step closer to Dogecoin in terms of market value. Dips in the price have seen Dogecoin lose its high position on the top crypto. It currently sits at 10th position, where it has fairly firm position with market cap of $32 billion, while #11 Terra (LUNA) has a market cap of $17 billion, leaving $15 billion in between.
While Shiba Inu has continued to show its viability in the market, the project has no real-world use cases other than being a hype-based coin. However, the meme coin which many had speculated would die out within its first few months of launch has continued to impress. This recent rally is a good show case of how a crypto project may be a viable investment option as long as there are investors willing to invest and hold the coin.
Source: CoinMarketCap
Alternative narrative to the cause of the rally
Despite the popular narrative that Elon Musk’s tweet pumped the price, blockchain data shows that the seemingly irrational rally may be prompted by moves by SHIB “whales,” who hold large amounts of SHIB, which were followed by retail traders, or the so-called SHIBArmy.
Data from blockchain data firm Santiment shows that the number of SHIB transactions worth more than $1 million has been going up dramatically along with the price rally.
A wallet-tracking Twitter account also captured a whale purchase of more than 6 trillion SHIB on Sept. 30, just a few days ahead of the skyrocketing price move.
Notably, the increased whale purchases of SHIB also came after India’s Crypto Covid Relief announced on Sept. 23 the conversion of 50 trillion SHIB tokens – donated by Ethereum co-founder Vitalik Buterin – into USDC stablecoins has come to an end. London-based crypto market maker Wintermute was responsible for the conversion.
While the whale moves on SHIB may give a glimpse of how the pump may have been triggered, the high amount of whale transactions may not be the best news for SHIBArmy because according to Santiment, it often coincides with a local price top.
How about Dogecoin?
Shiba Inu has not been the only dog-themed meme coin to benefit from the hype generated by Musk’s dog. Floki, a meme coin named after the pet, also rallied along with SHIB. Also Dogecoin has benefitted from the hype, but not at the same level with other meme coins.
Doge’s price broke through $0.27 following Musk’s tweet, a one-month high for the meme coin. Yet, it has not followed SHIB’s growth pattern over the past few days.
At the time of writing Dogecoin trades at $0.24, with 10.5% gains on a weekly chart, compared to SHIB 266% gains on the same time frame.
With recent Dogecoin adoption in the space, many were expecting to see significant movement in DOGE price. So far it has not performed as expected, but with a strong community that Dogecoin has, as history has shown anything is possible.
