CRYPTO MOVERS AND PRICES
ETH is threatening a move towards a new all-time high this AM. Bitcoin Dominance, which has not been above 50% since late April, is now 44%.
Crypto Story of the Day
Shiba Inu (SHIB), a currency created largely mimicking Dogecoin (DOGE), has rallied to a record high market cap of USD 35B. However, despite BTC’s mainstream adoption, most Crypto use-cases have yet to evolve past speculation.
In June, when Coinbase announced it would list SHIB, the venue described the token as aspiring ‘to be an Ethereum-based alternative to Dogecoin (DOGE), the popular memecoin.’ The coin’s official website describes SHIB, nicknamed ‘the DOGECOIN KILLER,’ as ‘an experiment in decentralized spontaneous community building.’
Archived versions of the website from October 2020, when DOGE’s market cap was USD ~300M, feature much of the same messaging as it does today: competing with DOGE and decentralized community building. For example, upon its creation In July 2020, by an anonymous creator known as Ryoshi, half of the coin’s supply was sent to Ethereum creator Vitalik Buterin’s wallet. Buterin later donated USD ~1B worth of SHIB, based on prices at the time, to COVID-19 relief efforts in India in July and burned USD ~6.7B worth of the token.
The remaining half of SHIB was deposited for trading on decentralized exchange UniSwap. The token’s whitepaper also describes a decentralized trading venue called ShibaSwap, which seems to have launched in July 2021. According to DeFi data site DeFi Lama, ShibaSwap currently has USD 505M worth of crypto deployed in its protocol. In July, the venue reached a record high of USD 1.76B in deployed capital. Binance announced it was listing SHIB on May 9. SHIB had rallied from a virtually non-existent market cap, to USD ~14B in the days ahead of the Binance listing.
Coinbase announced it would list SHIB in June, with the asset beginning to trade on September 16. Coinbase’s SHIB/USD trading pair reached a volume of USD 4.2B on Wednesday, surpassing BTC/USD, which saw a volume of USD 1.2B on that day. In addition, Binance’s 1000SHIBUSDT perpetual contract saw a volume of USD 22B on Wednesday (see Chart Of The Day). Over the past 30 days, the contract’s 24-hour volume has averaged USD 4.1B.
By comparison, Binance’s BTC/USD perp has averaged USD 25.9B over the past month. Over the past 30 days, the US has led Google searches for ‘Shiba Inu,’ ahead of the Netherlands, Australia, Cyprus, and Nigeria. In addition, the SHIB token has a number of Twitter accounts with significant followings. For example, ‘[t]he only official Twitter account for the SHIBA ecosystem’ has 1.5M followers, while the SHIBArmy profile, which directs users on how to buy the asset, has 300k followers.
Takeaway: On one hand, SHIB’s growth and popularity, seemingly driven via social media, speaks to the broader nature of the crypto market. This market is, in part, characterized by the presence of investors whose investment decisions are driven by new and emerging information/news sources.
On top of this, the listing of SHIB by a number of major exchanges, namely Coinbase, has made the coin highly accessible. On the other hand, SHIB is explicitly a knock-off of DOGE, viewed as a ‘joke currency.’ Its explosive growth highlights that while BTC and crypto have seen mainstream adoption, i.e., Coinbase listing, ETFs launching in the US, etc., the vast majority of cryptocurrency use cases have not established themselves beyond speculation. While SHIB’s ‘success’ is unique, similar projects will likely continue to emerge in the space, attempting to emulate the token’s growth.