On Wednesday, the cryptocurrency Shiba Inu briefly hit $40 billion in market cap as it closed in on rival dog-themed token Dogecoin, which is currently down more than 50% from its peak earlier this year.
Shiba’s rise seems sudden, but the dog-themed coin’s popularity has grown steadily since May, when its market cap briefly surpassed $8 billion. Launched in August 2020, Shiba is now the 10th largest cryptocurrency.
On the one hand, Shiba Inu’s mascot (the Shiba Inu dog breed) is the only characteristic it shares with its rival Dogecoin. Shiba was constructed as an “experiment in decentralized spontaneous community building” according to the project’s white paper, whereas Dogecoin was designed to be a satirical take on internet meme culture. And while Dogecoin’s developer community and long-term roadmap are notoriously sketchy, the Shiba ecosystem is seeking a number of use cases, including a decentralized exchange.
On the other hand, Shiba -- which calls itself the “Dogecoin Killer” -- is just another dog-themed cryptocurrency hyped up by online speculators through Reddit, Telegram, and other online communities. By extension, in spite of its astounding market capitalization, Shiba is just another “meme asset” whose rise in value is untethered from any fundamental analysis or network utility.
Shiba coin is far from the only decentralized project -- there are dozens of decentralized cryptocurrencies available. Many have been engineered by respected cryptographers and technologists, receive backing from leading Silicon Valley venture capitalists, and boast sophisticated governance systems. But it is Shiba -- an asset like Dogecoin, whose core appeal is its hilarity -- that is the hottest asset in crypto.
But the appetite for dog-inspired meme cryptocurrencies is so voracious, even Shiba Inu is already facing fresh competition in the form of Floki Inu, a new coin reportedly named after the future dog of Elon Musk (the original Dogecoin promoter). Floki Inu coin has risen over 1,500 percent since August; the project is barraging London’s subway system with advertisements. Moreover, Floki says it has partnered with the food insecurity group Millions Garden Movement, which is associated with Kimbal Musk, Elon Musk’s brother and a Tesla board member. Floki’s core appeal to investors, it seems, is that it embodies multiple meme references at once.
Bitcoin investors might dismiss all this madness, but that would be a mistake: Dogecoin, Shiba Inu Coin, even Floki coin are part of the cryptocurrency universe that Bitcoin created and still belongs to. Bitcoin may have recently hit new highs above $65,000, but it has now settled in at $60,000 once again, failing to even approach the extraordinary price predictions of so many analysts over the last six months.
Those who have already made money investing in Bitcoin won’t be complaining too much with its recent performance, and to be sure, plenty of potential upside remains for the patient investor. But the longer crypto’s meme coin parody dominates headlines, the less Bitcoin becomes about Bitcoin, and the more it becomes about broader crypto chaos.
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