3 Reasons New Crypto Investors Hunt Coins Like Dogecoin and Shiba Inu
Since Bitcoin hit its all-time high of nearly $ 69,000 a few weeks ago, more and more people are paying attention to cryptocurrencies. This is even more true when talking about crypto memes such as Dogecoin and Shiba Inu.
For example, Shiba’s official Twitter account recently surpassed 2 million individuals, surpassing 1.8 million Ethereum subscribers. Shiba also counted more than one million holders of its token last week, according to an independent audit on its website. Finally, Shiba’s total market cap is over $ 20.2 billion, ranking it 13th among all cryptos, while Dogecoin is valued at $ 28.5 billion, which puts it in 10th place.
But major dog-themed memes are currently under heavy price pressure. As of this writing, SHIB was trading at $ 0.000037, marking a 57% decline from its high of $ 0.0000879 posted on October 27, and it has fallen 10.69% over the past few years. last 24 hours. Likewise, Dogecoin is also down 4.03%, and the meme litter’s newest puppy, Floki Inu, is down 14.89% from last day. Both are also down significant percentages from their all-time highs. Despite these current price pressures, it seems crypto newbies can’t get enough of the coins itself.
Reasons why new crypto investors love meme tokens
There seem to be a small handful of reasons why investors are so drawn to this new variety of memes-based crypto.
- Great brand recognition. Strong brands reduce information costs. Cryptocurrencies, blockchain, NFTs, smart contracts, etc. are complex subjects that take a long time to learn – I write about these things every day, and I am still learning! Strong brands are a shortcut in the learning curve. You automatically know what Nike, Budweiser, Mercedes, Victorias Secret are. Meme tokens convey similar attributes and familiarity so that investors can feel comfortable with their decision without the due diligence required.
- Active community. The Doge and Shiba communities are among the most loyal and active in all of the cryptoversy. While beginners may initially find solace in this support, these communities can instantly turn into echo chambers of wrong thoughts, bad ideas, and outright lies. Still, there is comfort and security in the numbers, which helps validate investment decisions – whether or not those decisions are sound.
- Cheap entry point. Each of the memes-inspired cryptos mentioned in this article are extremely inexpensive – Doge costs less than $ 0.22 per unit and the rest are each less than $ 0.002 per token. But the ultra low prices make many new investors believe that they can get rich if they have a few hundred thousand tokens. Unfortunately, the price is not the same as the value in crypto. In addition to the price, the value takes into account the overall time frame of the asset’s tokenomics. Unfortunately, many new creators of cryptocurrencies ignore this.
Even tokens have challenges
There are other considerations that new investors ignore regarding tokens themselves. For example, they tend to have high concentrations of existing supply stored in a few dozen wallets. This level of centralization is a sub-optimal investment that can be manipulated.
Doge and Shiba both have unlimited supply of tokens which can be mined indefinitely. Economics 101 teaches that the more something is available, the less valuable it is. This is a big problem for fiat currencies, which continue to flood the markets with fresh silver, and it is also a problem for the coins themselves.
Finally, the limited use cases right now, coupled with disappointing development roadmaps for the future, don’t inspire confidence in the dog-themed “meme dream team”. Especially when you consider groundbreaking projects like Ethereum 2.0, Chainlink, Cardano, Decentraland, Energi, and many more, all of which have varying uses and solve a variety of problems.
While meme assets can be an understandable dog door in the crypto space for new entrants, it’s best to walk through this entrance quickly so you don’t get stuck there.