Meme tokens and dogcoins have been an integral part of the current uptrend throughout the cryptocurrency market. Among the plethora of these tokens that have been flooding the market, two of these tokens, the longest-standing memecoin Dogecoin (DOGE) and Shiba Inu (SHIB), have gained the most traction and popularity.
SHIB recently started to rally on October 23 from trading at $ 0.000028 to hit an all-time high of $ 0.000086 on October 28. Since then, the token has cooled down to trade hands at $ 0.000052. Despite that, the token has posted gains of 195.5% in the last 30 days and an incredible 72,954,679.8% annual gains.
This led the token to briefly appear in 8th place on the list of the top 10 cryptocurrencies by market capitalization, but due to the price drop, the token slipped out of the top 10 to fall to 11th place with a capitalization of market of around USD 32 billion, as of press time.
Such returns have put investments in the token in the race for the “Best Trade of All Time” as it is revealed that a crypto wallet address bought $ 3,500 worth of SHIB tokens in August 2020, which multiplied to get to be worth more than USD 1.55 billion at the peak of the market. Another wallet, at one point, owned more than 13% of the total supply of more than 549 trillion tokens. However, this whale wallet moved USD 2.3 billion in SHIB tokens on November 5 in four equal transactions to four different wallets.
These returns led to a lot of widespread attention and around the token. In the wake of the all-time spike, SHIB also started to gain adoption for the utility of the token. Despite its extreme volatility, AMC Theaters CEO Adam Aron announced that the company is considering adding the token as payment for the purchase of tickets. Le Bistrot d’Eleonore et Maxence, a bistro in Paris, has started accepting SHIB as payment.
Momentum from the SHIB token was transferred to DOGE and investors began circulating their SHIB earnings on DOGE, leading the token to gain 44% in a single day on October 28 and hit a 90-day high of $ 0.33. This rally took the token to ninth place among the top 10 cryptocurrencies by market capitalization. The token is currently trading at $ 0.25, nearly 65% below the all-time high of $ 0.73 the token reached on May 8, fueled by Elon Musk’s tweets promoting the coin. As of this writing, the market capitalization is nearly $ 35 billion.
Cointelegraph spoke with Johnny Lyu, CEO of cryptocurrency exchange KuCoin, about this phenomenon that has caught the attention of many retail investors. Said: “Popular meme coins broke into the top 10 and topped the charts for some time in terms of transaction volume on exchanges, surpassing even Bitcoin. We can say that the chances of becoming a permanent member of the top 10 clubs are quite high “.
So if some of the more prominent memecoins arguably “made it,” can the other high-risk tokens join the feat at the top of the market cap charts, or is there only room for so many tokens?
Meme tokens and dogcoins flood the market
After the popularity of Dogecoin skyrocketed, there were a host of dogcoins and other meme tokens joining the industry. One of these tokens was SHIB, which has since achieved a market capitalization in the range of DOGE itself. The SHIB development team also developed another token called Doge Killer (LEASH). The token is currently trading hands at $ 3,256.73, posting a return of 130.3% recently.
Another token that is trying to capitalize on the current hype is Dogelon Mars, a token that is based on Tesla CEO Elon Musk and his love of space travel.. In October, the coin posted more than 3.780% gains, in addition to appearing on OKEx and Crypto.com on October 29, topping SHIB’s 850% gains.
There are many more tokens that have been launched on various blockchain networks, sending meme tokens all over the crypto ecosystem. For instance, The Australian Safe Shephard (ASS) token is the dogcoin based on Binance Smart Chain (BSC) and Samoyedcoin (SAMO) is a dogcoin on the Solana network.
Lyu mentioned: “It seems that the older the cryptocurrency, the stronger its position, and it is not that easy for beginners to get to the top and take their place in the sun.”. He added that having two meme coins in the top 10 is more than enough and other meme coins stand no chance. However, he commented: “But that’s the beauty of cryptocurrencies: anything can happen.”
Justin Trollip, the core team member at Pangolin, a decentralized exchange, told Cointelegraph that the short-term potential of all highly speculative dogcoin and meme tokens on blockchains is unpredictable:
“We are in a furious bull market, so speculative assets that have a large advantage tend to perform well. We are in a cycle of memes right now, so I think there is room for advantages in many of these tokens. Again, it all comes down to your terms as an investor. Personally, most of the people that I have seen who have made huge profits from meme tokens generally do not make a profit and see them as long-term assets. I would say this is a risky strategy. “
Several of the new meme tokens have posted impressive gains in October, SAMO made a 2.925% gain in October to reach a market capitalization of USD 389 million and Hoge Finance’s HOGE increased by 2.923% with its market capitalization currently at USD 189.79 million above USD 15 million in early October. But that does not mean that these types of tokens will continue to post such impressive rallies.
Trollip added: “For these tokens to continue to perform well in the top 10 for the next few years, they would have to overcome some pretty impressive projects and the maturing cryptocurrency class of investors. Personally, I think they will be overtaken on a longer time horizon. “ He also mentioned that the recent trend for meme tokens is driven entirely by speculation and in some cases even manipulation of social media. But, as seen with SafeMoon, you think there is a limit where marketing takes a token.
Social media promotion of meme tokens
Social media is playing a major role in the growing adoption of these meme and dogcoin tokens. Elon Musk is one of the market forces that, in most cases, has indirectly influenced the price movements of DOGE and Floki Inu (FLOKI) through sporadic posts on Twitter.
Floki frunkpuppy pic.twitter.com/xAr8T0Jfdf
– Elon Musk (@elonmusk) October 4, 2021
Nevertheless, It is debatable that such activities that directly impact asset prices could be frowned upon by financial regulators such as the United States Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In this perspective, Lyu opined that “if Elon received advertising money from the creators of DOGE, then he should be held responsible since he did not report that his messages on Twitter were advertising. But, if Elon bought tokens and wrote that he believes in them, this is his right and there is nothing criminal about it. “
Such activities in traditional financial markets with assets such as stocks, commodities, bonds, etc. are prohibited by financial regulators. However, according to Trollip, opening the doors to that world for crypto tokens would lead to the loss of Satoshi’s original vision:
“Currently, traditional assets are still pumped behind closed doors on a regulated basis. It’s not that it’s not happening, it’s just that within that framework, the winners are already predetermined. I am concerned that you are already starting to see this slippage in cryptocurrencies. With the current craze for enrichment schemes, most people don’t care about Satoshi’s spirit and only care about money. “
Such an attitude may be extremely detrimental to cryptocurrencies in the long run. This could reverse the progress made over the years by the broader industry to drive the financial world into an even more dystopian future.
However, new dog coin and meme tokens enter the market every day that retail investors tend to buy in hopes of replicating the gains posted by DOGE and SHIB in the past. In fact, The hype for dogcoins has grown to such an extent that even the demand for real dogs is reportedly increasing.
While a fluffy Shiba Inu puppy is definitely a good way to ensure long-term happiness for the owner, meme coins are far from a safe bet and should be exchanged at your own risk. A speculative bet on a low market token may not pay off, as can an investment in a well-established dogcoin, as its bullish and social media sentiment could already be at an all-time high.