Nov 3, 2021
What the SHIB is going on here?
There is a new Sheriff in town and the cryptoverse is beginning to notice. Thanks to a parabolic rally over the past few weeks, Shiba Inu (SHIB) also dubbed as “Dogecoin killer” has become the ninth-most valuable cryptocurrency in the world.
While most serious crypto investors have largely ignored the SHIB coin, the meme-token is now too valuable to be laughed off. So what the SHIB is going on here? I have my own thoughts and in this post I would like to add my two cents to the discussion.
First, let’s start with Bitcoin, the big daddy of them all. To argue otherwise is exerscise in futility. Jeff Booth clearly gets it. If you haven’t read his book The Price of Tomorrow: Why Deflation is the Key to an Abundant Future then I strongly suggest you look into it. Here is a recent tweet by Jeff Booth.
Implicit in Jeff’s tweet is that somehow Bitcoin is for the poor. The rich get richer, the poor get Bitcoin — the narrative being that using Bitcoin can level the playing field for the world’s poor as we work toward economic justice. A bit utopian but hell yeah — sounds good! I have been screaming “F*ck the banks for quite some time now.”
However, somehow this narrative might not really resonate with the youngish meme coin army. Certainly not with me. While the Bitcoin maxis like to propagate this equality narrative you’ve got Michael Saylor who proudly gloats that his company has $2.2 billion of debt and pays about 1.5% interest on that debt.
Kudos to Michael — I’d borrow a billion myself but the last time I asked for a bank loan I got laughed out the bank (true story). So while Preston Pysh is making fun of Dogecoin by naming it the Cuban Coin, a lot of young retailers (including my youngISH self) consider Bitcoin more of a Posh Coin — only for the rich and folks that got in early and now are trumpeting their Bitcoin tunes to pump their pockets.
So what the SHIB is going on hypothesis #1: Bitcoin is a ‘Posh Coin’ and the SHIB narrative is a big fat middle finger to all the Bitcoin maxis and the whales.
Another point of meme coins is that they are a joke — literally. For example, Dogecoin’s origin story reads as a parody of Bitcoin. It was created by software engineers Billy Marcus and Jackson Palmer back in 2013 quite literally to poke fun at Bitcoin. They used a popular meme at the time — a Shiba Inu dog with a purposely misspelled “doge” in the title. It was not meant for actual investments or to serve any real-world utility.
Mark Cuban gets it. He is clearly having some fun. In fact, he likens them to a lottery ticket.
Say what? A lottery ticket…
Here is a little story if you haven’t heard yet. (Once upon a time) someone purchased $8000 of $SHIB (last August). It is now worth $5.7 billion!
If true it is the greatest trade ever while at the same time making George Soros look like Sideshow Bob. I haven’t bothered to dig deeper into it. Might be fake news who knows — who cares. The math part might as well just work out. SHIB is up 95467365.6% for the year.
So what the SHIB is going on hypothesis #2: The Shib army is just having some fun. It is a community of youngsters who don’t particularly care about tokenomics or consensus mechanisms. They liken it to a lottery ticket that might just take them to the moon.
In conclusion, would I invest in a meme coin? HELL NO — thank you very much. I work too hard for my money to gamble it away on some meme coin. I just wanted to share some dynamics that might be at work. This post is meant to be fun! In reality there are more complex dynamics at work. Raoul Pal et al. has some fascinating insights on this topic so be sure to check out Real Vision Crypto. Suffice to say is that there are plenty of narratives that encompass small cap coins that might be well worth the gamble. Chur to that!
Happy meme coin’ing ya’ll.
DISCLAIMER: My writings are merely a reflection of my learning journey and my attempt to compartmentalize the cryptoverse. I am learning out loud so feel free to correct me or disagree with me. This is not investment advice but my hope is that you find value in some of my links and ideas. As a former academic, I also recognize that I will need to sharpen my paraphrasing and referenceing skills.
