The popularity of meme tokens exploded in 2021, and Shiba Inu (SHIB) was a front runner. The value of SHIB peaked last October, reaching $0.00008 from merely $0.0000076 in June 2020: that was a gain of more than 1,040 percent.
Additionally, the extraordinary returns made many early investors of the project into millionaires. One of the most highlighted trades reported in October revealed that an early anonymous SHIB investor turned $8,000 into $5.7 billion in 400 days, making it the greatest known trade of all time.
But, what is fueling this price surge?
Unlike Bitcoin and Ethereum, SHIB falls in the category of a meme token. The project is completely driven by the interest of a community and does not have any real-world applications.
Indeed, the project was introduced in 2020 as ‘Dogecoin killer’, referring to another meme token. In addition, SHIB succeeded to surpass the market cap of Doge briefly, and both of them even attained two of the top ten cryptocurrencies in terms of total market cap.
A Speculative Growth
However, Shiba’s speculative demand dropped drastically from the peak, and the token is now trading at $0.000038, almost 53 percent lower than its peak value. But, that does not mean the token is dead. It still holds more than $20.9 billion in total market capitalization, according to Coinmarketcap.com.
So, how will the meme token perform in 2022? Will it witness another upward drag to take its price to another level? Or, will it eventually vanish?
“Pinpointing a meme coin like Shiba Inu’s trajectory is quite hard to predict due to the ways it has grown,” said Nigel Frith, the Lead Analyst at Bitcoinmoney.net.
Despite being very speculative, the Shiba Inu community has become very strong. The project even received endorsements from many celebrities and even from the billionaire, Elon Musk.
“If we remind ourselves, Shiba Inu was somewhat promoted by Elon Musk’s unpredictable tweets, stating that he would be supporting Shiba Inu instead of Dogecoin. This was the catalyst for Shiba Inu’s growth! Other factors are the petition to have the availability of Shiba Inu on the Robinhood platform and the meme coin’s non-fungible token, Shiboshis arriving on the NFT marketplace. As we all know, this caused the 50000000% growth which garnered the attention for meme coins in the world of crypto,” Frith added.
However, for the future growth of the token experts believe that it will follow the overall market trajectory. But, a single tweet from prominent personalities can push the price significantly higher.
“From where I stand, meme coins do not possess actual value,” James Wo, the Founder and CEO at Digital Finance Group, said. “They utilize the 'consensus of a community' to cover the fact that they are created just for the temporary fever of some retail investors making quick cash while whales and influencers take away most of the profits.”
Jahon Jamali, the Co-Founder and Managing Partner at Jahon Jamali, said: “The rise of Dogecoin and Shiba Inu certainly drives home not only the powerful community component of cryptocurrencies but the importance of interoperability. Dogecoin from a technical standpoint has enjoyed success partly to its ease of use and transactional capability across different blockchains. The DeFi space as a whole exemplifies this, and that has become a core focus of Shiba Inu’s appeal.”
Another factor giving a push to meme token prices is the acceptance of these digital currencies by several retail chains as a payment mode.
Shedding a Zero
Moreover, the SHIB community is tapping the popularity of the DeFi ecosystem to the advantage of the project. It is using the Shibaswap token to power its native decentralized exchange. Further, the community has agreed to a burning mechanism that will take a significant number of SHIB tokens out of circulation.
But, the meme token still has to astronomically gain in fiat value to shed another zero from its price. It has to add more than 163 percent to its current market price to reach $0.0001. Though it looks hard, such a surge in a short time is not impossible in the wild cryptocurrency market.
“The utility of Shiba Inu is growing, it has been accepted as payment for multiple retailers, which is a great sign of potential growth and sustainability. However, if it were to shed that ‘0’ it would come from the unwavering support from the meme coin’s amassed investors and also Elon Musk further supporting the meme coin and not dropping it,” Frith added.
The Meme Coin Market
“In each bull run or year of the bull run, there is a certain period of time when meme coins will outperform any other asset. We saw this in 2021 and will very likely see it in the upcoming year as well,” the Founder and CEO of CoinLoan, Alex Faliushin explained.
“Since it has a great community behind it and a decent burn mechanism involved, it can definitely go up in value. How much, this is a question everyone in the community would like to know, but it is nearly impossible to answer since it is a highly speculative currency. As mentioned, the value of some of the most popular meme coins will be rising. There will be a lot of hype around other projects too that are looking to replicate the success of the stars, but it is unlikely that there will be many great meme projects. We expect at least a few to be added to the top 100 coins by capitalization since the meme coins have proven to have their own place in the whole ecosystem. The only question is for how long they will be able to stay in such high capitalization, as more and more projects are coming to the ecosystem, only time and the market will tell.”
