Shiba Inu was hitting an all-time high (ATH) of $0.00008876 last week and hitting the top ten by passing competitor, Dogecoin. However, since then, the currency’s momentum has slowed considerably, triggering a sell-off that bottomed at $0.00004264 on Thursday – a drop of 52% in seven days.
Given the severity of the drop, at a time when large caps, including Bitcoin, are largely stable, critics are calling it a tipping point for the worst to come. But are they right?
Shiba Inu falls back to Earth
Shiba Inu’s price performance in October surprised opponents, closing the month up 730%. Analysts say this was mainly due to rumors about Robinhood and Kraken listing the SHIB token. But so far, these rumors have not materialized.
This week, things took a turn for the worse when a Shiba Inu whale handled billions of SHIB tokens, raising fears of a full-scale exit. Furthermore, the incident highlighted the issue of whale dominance in the Shiba Inu ecosystem.
When October came to an end, it was discovered that a trader had invested $8,000 in SHIB last August, which has since grown to a whopping $5.7 billion.
Tom Robinson, the co-founder of Elliptic, a forensic encryption blog, commented that this same investor is responsible for moving billions of dollars in tokens, which he estimates at $2.78 billion in total, in four transactions.
It appears that there were four transactions from that account yesterday, each sending $695 million of SHIB to a different account – a total of $2.78 billion.
Whoever bought SHIB on Uniswap about a year ago, for not much.
SHIB is dominated by whales
address analysis shows that, the top ten holders currently control 67% of Shiba Inu tokens. This is slightly lower than October 30, when the number was 72%.
Critics jumped at this as more evidence of bad fundamentals. In this case, it concerns the concentration of tokens in just a few hands.
Investor Aaron Brown said legitimate cryptocurrency designs have a solid underlying use case and don’t rely on hype or “who owns how much of it” to change the price. Brown raised concerns that SHIB’s ownership concentration points to “fraudulent gambling.”
But for cryptocurrency with no underlying economy – whose value is determined only by speculation – concentrated ownership suggests fraud.
Robinhood CEO Vladimir Tenev ruled out listing SHIB, citing regulatory scrutiny as the reason. And although Kraken said he would list the token if they got 2,000 likes in a tweet, they dropped the idea despite getting 80,000 likes.
With coins with these characteristics gaining traction in recent days, it’s time to ask if the hype train has expired?