It ends up that the crypto market hasn’t gotten ill of canine-themed meme coins right now.
Self-claimed “DOGE killer” shiba inu (SHIB) has pumped by nearly 400% in the past week, pushing the token to the No. 13 most valued cryptocurrency by market capitalization, according to data compiled by CoinGecko.
The apparently odd price pop of one random coin amongst countless others has had some crypto traders scratching their heads: Why SHIB and why now?
“I would say it’s just crypto being crypto,” Ashwath Balakrishnan, an associate at crypto analytics firm Delphi Digital, said. “When markets go risk-on, the meme coins tend to benefit.”
Despite a popular story that electrical vehicle maker Tesla’s CEO Elon Musk might have inadvertently pumped the price, blockchain information reveals that the apparently unreasonable rally might be triggered by SHIB whales relocations, which was followed by the power of retail traders, or the so-called SHIBArmy.
SHIB whales
Data from blockchain data firm Santiment shows that the number of SHIB transactions worth more than $1 million has been going up dramatically along with the price rally.
A wallet-tracking Twitter account likewise captured a whale purchase of more than 6 trillion SHIB on Sept. 30, simply a couple of days ahead of the increasing price relocation.
Notably, the increased whale purchases of SHIB also came after India’s Crypto Covid Relief announced on Sept. 23 the conversion of 50 trillion SHIB tokens – donated by Ethereum co-founder Vitalik Buterin – into USDC stablecoins has come to an end. London-based crypto market maker Wintermute was responsible for the conversion.
CoinDesk connected to Wintermute for remark about the SHIB pump however the company did not return ask for remark by press time.
While the whale moves on SHIB may give a glimpse of how the pump may have been triggered, the high amount of whale transactions may not be the best news for SHIBArmy because according to Santiment, it often coincides with a local price top.
Retail trend
On the retail trading side, information offered by blockchain analytics company Kaiko reveals that trading volume throughout the 8 most liquid SHIB/USDT markets all increased on Oct. 4 around 13:00 UTC and 20:00 UTC, and after that on Oct. 5 at 14:00 UTC.
According to Clara Medalie, Kaiko’s research lead, trading volume on different exchanges trending in the same direction is common because markets are integrated and overlapping. As an outcome, the trading information of SHIB/USDT sets on the 8 central exchanges cannot offer a response to where and when the pump started.
The conclusion is also supported by data on two trading pairs involving SHIB on a single exchange, Coinbase, according to Dessislava Aubert, a research analyst at Kaiko.
On Coinbase, the typical trade size increased for both SHIB/USD (crypto-to-fiat) and SHIB/USDT (crypto-to-crypto) sets, recommending that the token’s appeal is developed on “a broad client base” from both crypto locals and newbies.
Pump timeline
While the data does not give an answer to where the pump started, the timeline of the pump shows that the rally may have little to do with Tesla CEO Elon Musk’s tweet about his dog Floki, which was posted on Oct. 4 at 1:41 UTC.
Since SHIB began pumping, there’s been a popular story that the tweet by Musk, a billionaire who’s understood for his love of dogecoin, has actually activated SHIB’s insane gains.
“I’m not 100% sure what may have triggered [the pump], probably [investors] just got more comfortable once the whole market started to climb,” said Lucas Outumuro, head of research at IntoTheBlock.
Chats from SHIB’s Telegram group and Reddit community are filled with motivating messages of purchasing more SHIB without offering any, with speculations that online brokerage app Robinhood might support the meme coin quickly.
A representative from Robinhood said the company had “no comment” on the rumor.
Burn them all
Despite the gain, the token’s price is still down a little from its record high in May after the token was noted on a couple of significant exchanges. With the surging market capitalization of the canine-themed coin, SHIB’s rise also came as its total supply started shrinking.
Besides the tokens that were contributed to charities, Buterin had actually sent out more than 410 trillion SHIB to a dead blockchain address, taking them out of flow.
According to a Medium post by one of the team members, the SHIB project will deploy a number of non-fungible token (NFT) drops in the coming days, which will include a new token-burning mechanism.
Whenever the NFT owner alters the name of among the 10,000 “Shiboshi” NFTs, $100 worth of SHIB will be scorched.
“If everyone names their Shiboshis that will be a $1 MILLION dollar burn,” the post said.
According to Etherscan, the most significant holder of SHIB is an address marked as “Black Hole” that’s been just getting SHIB tokens. It is also the address used by Buterin to burn his SHIB tokens.
At press time, there are simply around 497 trillion SHIB distributing on the marketplace, according to CoinGecko, with an overall token supply of 1 quadrillion.
