The central theses
- Shiba Token, a Dogecoin clone, put half of its supply in the wallet of Ethereum inventor Vitalik Buterin.
- The move is an attempt to burn coins and keep prices high by taking some of the supply out of circulation.
- The value of SHIB has increased more than 1,500% in the past week.
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The creator of Ethereum, Vitalik Buterin, involuntarily accumulated 50% of the Shiba token supply over the past year. This week’s donation caught attention as the price of the token rose significantly.
What is Shiba Token?
Dogecoin’s rapid rise has spurred other projects to create imitators, including Akita Inu (AKITA), Doge Killer (LEASH), and Weed Doge (WOGE). The most successful, however, is Shiba Token (SHIB).
Shiba Token has no connection to Dogecoin, but the project is clearly designed to benefit from its resemblance to the original. Both projects use the Shiba Inu meme dog as a de facto mascot.
“With the nickname Dogecoin Killer, this ERC-20 token can stay (relatively speaking) well under a cent in a relatively short period of time and even surpass Dogecoin,” says the project’s website.
Shiba Token seems to have few technical goals. Rather, market trends should be used to climb through the ranks. That goal seems to have been achieved: the price has risen rapidly over the past week, increasing by more than 1,500% over that period.
Buterin’s wallet is used as a burning address
Despite the coin’s obvious start, much of the Shiba token price gains appear to be man-made. The project sent 50% of its circulating market capitalization to the wallet of Ethereum inventor Vitalik Buterin last year. There is now $ 13 billion of the coin in his wallet.
The final deposit to Buterin was SHIB 3.1 billion, an amount of approximately $ 90,000.
The Shiba Token Project views this action as “burning coins” – a common strategy to increase the value of new tokens.
Buterin is not associated with the project. However, he has full access to the unsolicited donation and could sell the tokens, which would lower the market and prices again.
Buterin has not commented on whether he knows the deposit and whether he intends to sell or hold the tokens, and after a year of holding, a sell-off seems unlikely. Even so, the unusual situation makes the price of the coin unpredictable.
Is Shiba Token Legit?
Shiba token is currently the 19th largest coin on the market. However, due to the unusual economic model of the cryptocurrency, its circulating market capitalization is difficult to calculate. CoinMarketCap sets its market cap between $ 10 billion and $ 25 billion.
There is reason to believe that some investors are taking the coin seriously. Crypto Exchange Binance has announced that it will list Shiba tokens, which gives the coin further legitimacy. Other major exchanges also list Shiba tokens, including Huobi Global, KuCoin, and Poloniex.
The aftermath of Elon Musk’s disappointing Dogecoin sketch for Saturday Night Live apparently resulted in the price of Dogecoin (DOGE) falling more than 23% in the past 24 hours. This could motivate investors to switch to the competing SHIB token.
However, due to the rapidly increasing price of the Shiba token, the coin should be handled carefully as large increases may not be sustainable.
Disclaimer: At the time of writing, this author had Bitcoin, Ethereum, and Altcoins valued at less than $ 75 and no Dogecoin or Shiba tokens.
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