Shiba Inus or squid? Crypto investors ride the latest craze, stoking bubble debate

[ad_1]

The Shiba Inu digital coin (SHIB-USD) has gone from obscurity (or meme status, depending on who you ask) to become the hottest cryptocurrency trade.

Already, crazy stories have emerged about small investors making their fortunes with the digital dog coin. For the uninitiated, Shiba Inu should not be confused with Dogecoin (DOGE-USD) – another dog-faced digital currency. Coincidentally, Doge also started life as a joke of sorts, on his way to becoming one of the hottest professions in the crypto world.

With the emergence of a new coin based on Netflix’s hit series “Squid Game”, the explosive price action of Shiba Inu has sparked a debate over which of these emerging coins are legitimate investments and which are scams. . The answer is likely to spill over into the hot cryptocurrency market, which is increasingly popular with large and small players alike.

According to Bank of America data that tracks crypto social media trends, Reddit / Twitter token mentions place Shiba Inu and Dogecoin in the top 5 for October with the biggest change in mentions month-over-month.

However, not everyone is on board.

“I’d rather stay away from all of this,” Geoff Golberg, crypto investor and CEO of social analysis firm, Social Forensics, said in an interview with Yahoo Finance.

Golberg, who got into cryptocurrency in 2015, isn’t as excited about Shiba Inu or Dogecoin as other retail buyers. “I am interested in cryptocurrency for the long term,” he said.

On the one hand, Golberg suggested that these ‘memes’ are used to get more people interested in cryptocurrency because they are fun and engaging.

Yet the other side of a booming business like Shiba could easily spell disaster. “A lot of people are going to get burned and maybe it will leave them with a bitter taste for crypto,” Golberg added.

The story continues

“I didn’t buy much”

The representation of the Dogecoin cryptocurrency is seen with the logo of the Shiba Inu cryptocurrency displayed on a screen in the background in this illustrative photo taken in Krakow, Poland on June 29, 2021 (Photo Illustration by Jakub Porzycki / NurPhoto via Getty Images)

Currently, Shiba Inu is worth a fraction of a hundred, 5 decimal places from a single dollar, (0.00007336 to be exact). This makes the token something like a penny stock, except as a cryptocurrency – and SHIB has even less regulatory guardrails.

The coin is so cheap because the supply is so great. Unlike Bitcoin (BTC-USD) and Ethereum (ETH-USD) which both rely on scarcity at different levels as a factor of value, in comparison, SHIB’s coin supply is so large it seems almost unlimited – about 400 trillion. For reference, the total supply of Bitcoin is capped at 21 million.

Last July, 39-year-old Joel Jelinski dipped his toes into the booming Shiba Inu business.

“I didn’t buy much,” Jelinski said, referring to the 10 million Shiba coins he bought on the crypto exchange, Bitmart. Nonetheless, the investment has paid off for the past three months, although he admits there isn’t much of a long-term commitment on his part.

You’re just watching something explode and you’re like “Whoa, it’s possible”. It’s fun to watch crypto trader Matt Kohrs

“I have tripled my investment now and it could go up or down,” said Jelinski, who admitted he didn’t know anything about the SHIB team and / or their growing ecosystem of products.

He doesn’t think of himself as a “Wall Street guy”, instead preferring to watch Youtube videos to try and keep up with the next “hot” cryptocurrency that might rise in value for whatever reason. According to Jelinski, he looks for “high risk, high reward” opportunities where he can throw a few hundred dollars and see what’s left.

“The power of the community”

Matt Kohrs, a stocks and crypto YouTuber with a significant following, is a huge holder of the Shiba Inu coin. He pointed to an unidentified crypto wallet on the Ethereum blockchain (ETH-USD), whose holdings in SHIB have grown from $ 8,000 to $ 4.7 billion in just over a year.

He admitted that part of what he said had motivated him and others was “the potential for such an impressive financial windfall.”

To date, he’s grown by over 1000% of his original investment, which means his $ 200 SHIB is now worth $ 2000. On Wednesday, he tried to buy an additional $ 10,000 from SHIB as its price rose rapidly, but tried a few platforms with no success.

“It was on hold for hours and hours and hours before it finally filled up” on Coinbase, Kohrs said. Coinbase, Robin Hood (HOOD), and even the New York Stock Exchange will sometimes suspend trading orders during times of increasing volatility. As to why he struggled to get his orders filled, he said these exchanges “probably weren’t expecting this kind of volume.”

Currently, Kohrs’ $ 10,000 bet is “a little underwater”, which means it hasn’t broken even. But he hopes that his bet “bought back the decline” will be able to yield dividends … in the long term.

“One of the main things I have learned this calendar year is community power. There is a good reason AMC (AMC) is trading at a higher value relative to what fundamental analysis is. typical would rate it, same with GameStop (GME). I think there’s a lot of value added from absurdly large community support, “Kohrs said.

Kohrs also shared a technical argument as to why SHIB might prove profitable for him at some point, the SHIB community is talking about “burning coins”.

Like stock buybacks, eliminating the oversupply of a cryptocurrency, even with an astronomically large supply, can improve the value of digital assets over time. After all, as Kohrs pointed out, when the supply of SHIBs currently runs into the hundreds of billions of billions, it has started at a quadrillion.

As with researching very shorted stocks for the chance to incite a short contraction, Kohrs and others have pointed out a significant overlap in investor communities, between the so-called “SHIB army” and the mob. of Reddit retail who call themselves “monkeys.”

“It’s not the same symbolic representation as AMC or GME,” Kohrs told Yahoo Finance.

“It’s just another thing that turns heads, the same way GameStop turned people’s heads in January before it became a fight for fairness and transparency in the marketplace,” he said. -he explains. “You’re just watching something explode and saying to yourself ‘Whoa, it’s possible’. It’s fun to watch.”

David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.

Read the latest financial and business news from Yahoo Finance

Read the latest cryptocurrency and bitcoin news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard and LinkedIn

[ad_2]