‘Meme’ cryptos have been cast into the limelight in the past few months thanks to Elon Musk. He has been a vocal supporter of Dogecoin which has led to a huge surge in the price.
Other coins have also benefited massively, and one of the most popular is Shiba Inu. It has been stylised as a ‘Doge killer’ and it has undergone a significant price rise and plenty of volatility.
But, what is the difference between these two cryptos and how should you decide which one to invest in?. Keep reading to find out the essential details to know.
What is Dogecoin?
As you may be aware, Dogecoin was initially started as a joke. It was created in 2013 by Jackson Palmer and Billy Markus. It is stylised from the Doge internet meme. Whilst, it may have started as a joke, it does possess some utility. It was forked from Litecoin which is similar to Bitcoin. However, there is one key difference, and that is the supply. Dogecoin’s supply is not capped and therefore it is inherently inflationary. The high supply results in a low price which has made Dogecoin a viable choice for tipping in the past few years.
The Musk Factor
However, interest has surged since Elon Musk got involved in promoting the coin. He has been continually tweeting about it which has ramped up retail interest, and many celebrities/influencers have also been involved. This has driven a ‘Doge mania’ which may have peaked when Elon Musk even mentioned the crypto in an iconic SNL appearance. The crypto has thus far failed to reach the peak it had before the show aired.
More recently, the price has surged once again thanks to an upcoming listing on Coinbase. It may have started as a joke, but even institutional investors are finding it hard to ignore the path made by Dogecoin.
What is Shiba Inu?
With the Dogecoin hype in full flow, many competitors have emerged that aim to emulate the buzz and excitement created by the coin. Shiba Inu has been known as the ‘Dogecoin’ killer, and this new crypto was created in August 2020 by an anonymous person known as “Ryoshi”. Shiba Inu is an ERC-20 token that runs on the Ethereum platform. It is named after a Japanese breed of dog, which is shown on the coin’s symbol in a similar fashion to Dogecoin.
The coin has been very popular with Chinese traders who have helped to push the price up. In terms of utility and underlying value, it is similar to Dogecoin in the fact that it can only be used as a token of transfer.
The Vitalik Factor
The owner gifted half of the initial supply of Shiba Inu to Ethereum founder Vitalik Buterin, and recently Vitalik donated these 50 million tokens to the India covid crypto relief fund. Naturally, this sent the price of the coin down.
Dogecoin vs Shiba Inu Supply
It is always important to consider the tokenomics of crypto investment. The supply mechanism of Dogecoin is fairly unique in comparison to mainstream crypto assets. As mentioned earlier, Dogecoin has an unlimited supply. This means that unlike Bitcoin, which has a capped supply of 21 million, there is no cap on how many Dogecoins can be created.
In comparison, Shiba Inu does have a capped supply, but it is still very large by crypto standards, with 1 quadrillion tokens to be precise. So both crypto assets are definitely not scarce. Around half of these holdings were in possession of Vitalik, and he decided to burn 90%, which was 410 trillion tokens worth around $6.7 billion. This drop-in supply could potentially help to start another bullish run for the coin.
Another key metric to note is market capitalization. Both Dogecoin and Shiba Inu already have large market caps which could lower the potential of seeing higher gains. However, it also means that they are both well established in the cryptocurrency space. Dogecoin sits comfortably in the top 5 crypto coins in terms of market cap, with a value of $55,690,489,567. Meanwhile, Shiba Inu hovers around the top 30 with a market cap of $3,930,545,083. This is pretty impressive when you consider how new Shiba Inu is.
Could SHIB Overtake DOGE?
What many people want to know is whether Shiba Inu could realistically surpass Dogecoin one day. The market caps are very different at this moment in time.
The SHIB community are passionate, however, and therefore another significant price surge cannot be ruled out. Many investors have flocked to it, in search of the ‘next Doge’. Dogecoin is already up significantly and even if it reached the $1 goal, that would not be an incredible increase in terms of percentage from where it currently stands.
Overall, both Dogecoin and Shiba Inu carry plenty of potentials as well as risk. These are purely speculative assets, and they have little fundamental value. However, they do have very enthusiastic supporters who have been able to affect their prices.
You should be aware of the significant risk before putting your money in. If you were sitting on the fence, now you will have a clearer idea of these two cryptos.
The article contains market commentary information, it should not be regarded as investment research or investment advice. Past performance is not a reliable indicator for the future.
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