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Meme coins on rise
Meme coins have made crypto trading accessible to younger retail investors with their low prices. Investors can acquire thousands or even millions of these tokens with just a few dollars, offering the potential for significant gains. In 2024, these tokens are among the winners of the market bull run, with their total market cap reaching $48 billion in the beginning of March.
It all began with the phenomenon of "meme stocks" like GameStop and AMC Entertainment experiencing dramatic price increases, fueled by the Reddit community WallStreetBets in late 2020.
In January 2021, the Reddit group suggested boosting the price of Dogecoin to mirror the success of GameStop. This idea gained traction, amplified by endorsements from Musk, leading to a rapid surge by 2,000% in Dogecoin's value.
Currently, over 1,300 cryptocurrencies are presented in the CoinMarketCap meme coin section. Dogecoin, the first ever meme coin, and Shiba Inu, the self-styled "Dogecoin killer," are the top market performers in terms of market cap, leaving the rest of the tokens far behind.
A recent post by the Shiba Inu lead on the X platform suggests strong ambitions on SHIB's side:
Dogecoin: First meme coin
Billy Marcus and Jackson Palmer launched Dogecoin (DOGE) in 2013 as a jest at Bitcoin. Dogecoin was created based on a meme based on the Japanese hunting dog Shiba Inu.
It was initially designed with a hard supply capitalization of 100 billion coins. However, the creators removed this limit to discourage hoarding and speculation. With an unlimited supply, Dogecoin lacks scarcity, which can impact its perceived value.
Unlike Bitcoin, which has a fixed supply of 21 million coins, Dogecoin's unlimited nature may lead investors to view it differently, not as a store of value but rather as a medium of exchange or a means of tipping and donations.
Dogecoin remained relatively stagnant from December 2013 to December 2020. Its trading volume surpassed Bitcoin and other cryptocurrencies combined in January 2014. However, it hit its lowest price of $0.0000869 on May 6, 2015. In early 2018, Dogecoin experienced a brief price increase before the overall crypto market crash.
In January 2021, Elon Musk's remarks led to a 339% surge in Dogecoin's value to $0.032642. Its highest price of $0.682 was reached on May 8, 2021. Despite celebrity endorsements, Dogecoin's adoption for business transactions remains limited.
In the last month, DOGE's price has surged by 105.06%, gaining an impressive average of $0.18.
Shiba Inu: Killer coin
Shiba Inu, introduced in August 2020 as the "Dogecoin killer," gained attention for its unique approach of donating 50% of its total supply to Vitalik Buterin, the Ethereum creator. The token surged by over 300% within a month, rivaling Dogecoin's frenzy in early 2021. It even rivaled Ethereum's trading volume in October 2021.
Vitalik Buterin's donation of over 50 trillion SHIB to charity and subsequent burn of 90% of his remaining tokens removed a significant portion from circulation. Despite a decline post-peak in 2021 and a quiet 2023, recent trends show a resurgence for SHIB. Its price has soared by 220.5% on the 14-day charts and nearly 250% over the past month, with a 223.3% increase since March 2023.
The recent Bitcoin rally gave Shiba Inu a 250% surge in price. In addition, SHIB wielded a market cap of $24.4 billion as of March 5.
However, SHIB's substantial supply remains a challenge. A potential solution could involve a burn similar to Buterin's in 2021, sparking another rally akin to 2021's frenzy. According to the Shibburn X account, the past two weeks have seen a total of 14,238,113,469 SHIB tokens burned, marking a 6,478.69% increase in the weekly burn rate.
Key metrics
Dogecoin surpasses Shiba Inu in several metrics, the most significant being market cap, $25 billion against $20 billion, respectively. Another one is the number of holders in profit. For Dogecoin this is 46.94%, while for SHIB it is 27.11%.
Shiba Inu bested DOGE in the price surge: 230% against 112%. In addition, Shiba Inu kicked off March with a bang, attracting over 8,400 addresses to peak at 21,000 daily new addresses, about 20 times the daily average in February. Shiba Inu's total addresses have also hit a new record at 3.88 million.
In another metric, SHIB's aggregated daily volume has neared the $600 million mark, a 200% surge compared to the figures observed on March 11. In comparison, Dogecoin (DOGE) has witnessed a more modest increase of approximately 92%.
Another important indicator to mention is the correlation with Bitcoin. Generally, meme tokens are closely tied to Bitcoin's performance, with their value often mirroring that of the broader cryptocurrency market. Shiba Inu has a 0.93 correlation index, while Dogecoin has 0.83.
Volatility is the biggest problem for meme coins, and here we see SHIB overpassing DOGE as well.
Although these metrics change constantly, the market data indicates strong competition between the two major meme coins. Overall, the two meme coin giants will most likely go toe to toe in the future.
Mushumir Butt
Gamza Khanzadaev
Tomiwabold Olajide
