The Shiba Inu Tweet from Elon Musk isn’t driving up the price of SHIB.
‘Meme coins tend to do well when markets are risk-on,’ says one expert.
Unfortunately, it appears that dog-themed meme currencies are still popular in the crypto market.
Shiba Inu (SHIB), dubbed the self-proclaimed “DOGE killer,” has seen its value surge by about 400% in the last week,
making it the 13th most valuable cryptocurrency by market capitalization, according to CoinGecko’s calculations..
Some crypto traders are baffled by the sudden increase in the price of one cryptocurrency among many others: why SHIB and why now?
Analyst Ashwath Balakrishnan, a coworker at crypto analytics firm Delphi Digital, stated, “I would say it’s just crypto being crypto.”. ‘Meme coins tend to do well when markets are risk-taking.’
Blockchain data suggests that the seemingly irrational increase could be spurred by moves made by SHIB “whales,” who hold huge quantities of SHIB, followed by regular traders, or the so-called SHIBArmy, despite the popular story that Tesla CEO Elon Musk mistakenly boosted the price.
Whales of the Southern Ocean (SHIB)
A rise in the frequency of SHIB transactions valued over $1 million has coincided with a huge rise in the number of blockchain data firms like Santiment.
Following a whale buy of over 6 trillion SHIB on Sept. 30, the wallet-tracking Twitter account also saw the price of SHIB soar.
Additionally, on September 23, India’s Crypto Covid Relief declared the termination of the conversion of 50 trillion SHIB tokens — given by Ethereum co-founder Vitalik Buterin – into USDC stablecoins. This coincided with an upsurge in whale purchases of SHIB. Wintermute, a cryptocurrency market maker based in London, converted the currency.
As of press time, Wintermute had not responded to requests for comment on the SHIB pump from CoinDesk.
In addition to providing an insight into how the pump was activated, whale transactions on SHIB may not be good news for SHIBArmy because they typically coincide with a local price peak.
The retail fever is in full swing.
According to data from blockchain analytics firm Kaiko, trade volume on the eight most liquid SHIB/USDT exchanges increased on Oct. 4 between 13:00 UTC and 20:00 UTC and again on Oct. 5 at 14:00 UTC, all at the same time.
Because markets are interconnected and overlapped, trade volume on several exchanges often trends in the same direction, according to Clara Medalie, Kaiko’s research lead. Trading data for SHIB/USDT pairs on the eight controlled exchanges,
on the other hand, does not reveal when or where the pump occurred.
In addition, Dessislava Aubert, a research analyst at Kaiko, says the finding is backed up by data from two trading pairings including SHIB on Coinbase.
According to data from Coinbase, the average trade size increased for both the SHIB/USD and SHIB/USDT crypto-to-crypto pairs,
indicating that the token’s appeal is built on “a broad customer base” of crypto natives as well as newcomers.
Timeline for the pump
While the data does not reveal the origin of the rally, the timeframe of the pump indicates that Tesla CEO Elon Musk’s Oct. 4 tweet about his dog Floki, which was sent at 1:41 UTC, may have had little impact on the surge.
A common narrative has emerged since SHIB began pumping: a tweet from billionaire Elon Musk, known for his fondness of dogecoin, prompted SHIB’s astronomical gains.
“I’m not 100% sure what may have prompted [the pump],” said Lucas Outumuro, head of research at IntoTheBlock, “maybe [investors] just grew more comfortable after the overall market started to surge.
In the Telegram and Reddit communities, readers are encouraged to acquire more SHIB and hold it,
with rumors circulating that online brokerage tool Robinhood may adopt the meme coin shortly.
There was “no remark” from Robinhood, a spokesman said.
All of them should be set afire.
It is still down from its record high in May after the token was published on a few major exchanges, despite the increase in token price. SHIB’s growth coincided with the canine-themed coin’s soaring market valuation, as the total supply began to contract.
Additionally, Buterin had transmitted over 410 trillion SHIB to a defunct blockchain address, thus eliminating them from circulation.
In the coming days, the SHIB project will roll out a variety of non-fungible token (NFT) drops,
including a new token-burning mechanism, according to a Medium post by one of the team members.
For every 10,000 “Shiboshi” NFTs the owner changes, $100 worth of SHIB is burned.
Every Shiboshi name will cost $1 million in pet food costs alone.
According to Etherscan, an address labeled “Black Hole” has been the greatest SHIB token holder, getting solely SHIB tokens. In fact, Buterin has been known to send SHIB coins to this address in order to burn them.
According to CoinGecko, only 497 trillion SHIB tokens were in circulation at the time of publication, out of a total 1 quadrillion token supply.
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