CRYPTO MOVERS AND PRICES
Crypto was unchanged this morning. BTC had traded range-bound between about USD 30,000 and 40,000 for 4 weeks.
Crypto Story of the Day
Coinbase’s decision to list Shiba Inu (SHIB)— a token launched in 2020 by an anonymous team with the aim of mimicking Dogecoin— highlights crypto exchanges’ incentives to list questionable projects.
On Tuesday, Coinbase announced that it will list SHIB. In the announcement, Coinbase described SHIB as a token “that aspires 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.” Upon its creation last year, half of the coin’s supply was sent to Ethereum creator Vitalik Buterin’s wallet. The remaining half was deposited for trading on decentralized exchange UniSwap.
The token’s whitepaper, dated April 29, 2021, also describes a yet-to-launch decentralized trading venue called ShibaSwap. The coin’s market cap remained at virtually zero for the majority of its existence before reaching about USD 14 billion in a span between May 7 and 10. Meanwhile, DOGE achieved an all-time high market cap of USD 95 billion on May 8.
This outperformance by DOGE corresponds to a period between May 9 to 22 which saw the most elevated Google search volume for “cryptocurrency” since 2018.
OKEx and Binance announced their listing of SHIB on May 10. OKEx’s announcement quoted CEO Jay Ha, who explained that the listing aims to “offer a diverse portfolio of cryptocurrencies, including memetic tokens, to allow a comprehensive investment experience for our valued customers.”
In 2018, Robinhood launched DOGE trading and described the coin as a “peer-to-peer electronic payment system.” It’s unclear to what extent SHIB is attempting to confuse investors in purchasing it by associating itself with DOGE.
Earlier this month, we described increased price correlations in the crypto market as indicative of a lack of differentiation between cryptocurrencies by investors. Sophisticated understanding of blockchain tech hasn’t kept up with the technology’s growing popularity.
Under such circumstances, events like a publicly-listed exchange listing an asset serve to give coins like SHIB greater legitimacy than they deserve. For example, Robinhood likely instilled greater confidence in DOGE as an investment when it chose to describe the asset as a “peer-to-peer electronic payment system.”
Venues often describe themselves as “apolitical” and merely seek to offer investors access to crypto for better or for worse. Regardless of that blanket assertion, it remains, at the very least, uncomfortable when a platform like Coinbase essentially co-signs, brings attention to, and enriches founders of ethically questionable projections.