The Bull Case
When it comes to reasons to be optimistic about Shiba Inu’s future, Drozdz points towards its trending nature and the overall positive market sentiment.
“The main factor that meme coin investors are watching is its popularity on social media. Elon Musk’s tweets have been particularly key historically,” he explains.
The relationship between social media trends and meme cryptocurrencies can’t be overstated, and Shiba Inu has demonstrated this correlation in its past performance. As long as it continues to enjoy celebrity endorsements and remains a topic of discussion, there’s potential for price surges.
Furthermore, “another factor that could positively influence potential rises on Shiba Inu is the recent 80% increase in the largest cryptocurrency, Bitcoin, since the beginning of the year,” Drozdz adds. The performance of Bitcoin often sets the tone for the rest of the crypto market. If Bitcoin continues on an upward trajectory, it may very well pull other coins, including Shiba Inu, along with it.
Adding to the bull case for Shiba Inu is the “Shibarium” project, which is a layer-2 (L2) blockchain network built on Ethereum intended to transform Shiba Inu from a simple meme coin into a comprehensive ecosystem. Shibarium was first proposed in May 2021 by Shiba’s anonymous creator in a now deleted post, and is now live for users wishing to transact on the network.
While Shiba Inu, like other meme coins, is characterised by high volatility and a huge total supply of 1 quadrillion coins, the introduction of Shibarium could mark a shift in the structure of Shiba, and potentially stabilise Shiba’s standing. Although there was an initial hiccup that momentarily left millions of dollars stranded due to a technical glitch, the Shibarium project holds the potential to redefine Shiba Inu’s position in the cryptocurrency market.
The Bear Case
While popularity can work in Shiba Inu’s favour, it could also be its undoing. According to Drozdz, “Shiba Inu’s biggest disadvantage seems to be at the same time its biggest advantage—fashion and popularity.”
The meme coin market is constantly evolving, with new coins being created almost daily. “There have been many similar designs since Shiba Inu was created, which in turn reduces the potential for Shiba Inu to become another seasonal favourite,” Drozdz says.
Shiba Inu’s biggest disadvantage seems to be at the same time its biggest advantage—fashion and popularity.
Pepecoin is a recent meme coin that made waves in the crypto market, shooting up from a market capitalisation of under $US1 million to shooting way over $US1.5 billion in a matter of weeks. While some lucky investors made some crazy gains, many more lost substantial sums of money once the project fell drastically after the initial eye-watering run-up.
The competition from these newcomers could potentially dilute Shiba Inu’s market share. As a result, the whims of the meme coin market and the constant competition from newer coins could push Shiba Inu into the shadows. Ultimately, it’s a double-edged sword, with its popularity and trending status both powering its growth and posing a potential threat to its future value.