Shiba has a market cap of 45 billion.
45% higher than Dogecoin.
9.5% the market cap of Ethereum.
4% the market cap of Bitcoin.
It launched in August of 2020, but I never actually heard of it until writing this.
I have been pretty negative on crypto the last 4-5 years despite being heavily involved in it and after doing some fast research on this thing, this is basically the flag for everything wrong with crypto.
Everything wrong with it.
The currency is an admitted joke, but the gains on it are currently insane.
The only reason that it seemed to come to life was Ethereum founder Vitalik Buterin owning an insane amount of them from being gifted half of the supply early on and then donating 1 billion dollars worth of them to India as a COVID relief effort.
Which technically that donation is worth 8 billion dollars now, but doubt anyone ever cashed out a significant amount of it.
It was reported that was a significant chunk of Vitalik’s Shiba holdings, which makes me guess he had an idea that donation would cause some form of price increase to try and promote use of it.
Which, if he held that 10%, he’d have the same value in his donation, but now a larger pool, so he can actually exit it.
But all that besides the point, this is why things like Bitcoin, Ethereum, Dogecoin, Tesla and many others will long term, bomb as investments.
Dogecoin’s market cap in December of 2020 was 600 million.
April of 2021, it’s 40 billion.
Entire reason I believe that happened, was the cult of easy money couldn’t pump bitcoin to get insane returns much more.
Example on this could just be a timeline in Bitcoin price.
Bitcoin had a surge in 2013/2014 to $1,000, where it took four years to break even on that high.
About 70% of accounts created in 2013 for Bitcoin, happened during that high, presenting a case most people lost money.
2017 comes and the same thing happens. Price surges to $17,000, over half of the investors came in during that run and for 3-4 years, it was a loss. Amazon, Apple, Microsoft, Facebook and even things like the a general S&P 500 buy outperformed Bitcoin.
COVID hits and that springs in a new bubble, the price hikes and the high so far has been at about $60,000.
Problem though…
The 2011 high was $30 and it drifted off to a $5 average.
That moved to the 2013 high of $1,000 in 2 years.
A 20,000% return for the buyers during that rush.
2013 the high was 1,000.
The point of a return was the 2017 surge, which was $17,000 at the high.
1,700% return
If someone held from the 2017 high to the 2020/2021 high, the return hits at about 330%.
A long wait with a massive risk pool for a return which while good, doesn’t hold that quick boat load of money factor the Bitcoin community wants.
That’s why Dogecoin surged.
People wanted to gamble on the idea of pumping a coin, where there’s no actual function, but the value is just the hope of a fast return.
Dogecoin flattened out and Shiba took off, replacing it as a joke, but the goal is easy/quick money.
And this is why all of crypto, will eventually run into a massive hurdle.
Launch
Pump
Insane returns
Boredom
Reduced price
Pray for a rebound
Move onto the next one, if the return can’t be 100%+ in 30 days.
This is going to keep happening and I wouldn’t be shocked if we get three more dogs with a 10 billion dollar plus market coin named after them in the next 24 months.
So the only question.
When does this all start to actually crash?
Pretty hard call on that one.
The reason being the truth that with any investment, people only officially lose money when they sell it.
If someone bought a rock for $100, chances are, even if just as worthless as any other rock, they wouldn’t just sell it for $1. They’d rather hold for the hope of a return for years, versus sell the $100 rock at a massive loss.
That creates an issue where all of these coins do on surface hold value, even if trading activity is low, due to a large hold position with owners.
My guess is we see the pattern we’ve seen for about a decade now.
Price hits a high.
Can’t hold much longer.
Goes down.
People hold until it’s about 30-50% of the previous high.
Some event happens and people go “Oh hey, why can’t this be $50,000 again”
The result is a rapid spike hits and the price goes up.
Where I believe it falls is when the market caps just get so big, that it performs this pattern, doesn’t manage to perform a 100%+ gain and people get upset with a 60% return and after that, it’ll chip away over the course of 5-20 years, until a relic of itself.
Bitcoin
Ethereum
Ripple
Dogecoin
Shiba
Insert other dog names here…
My guess is we see all of them for the next 10-30 years in some form, but all of them do go into this chip away cycle.
