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Shiba Inu Is Gaining Acceptance and Is Leveraged to Bitcoin’s Rally

Shiba Inu (CCC:SHIB USD) is finally showing signs of life, rebounding off its lows from the past three or four months. The meme coin is now trading up to .003144 cents per token as of Feb. 8. This is after hitting a low of .001911 cents on Jan. 22 early in the morning.

Source: Maria Shipakina / Shutterstock.com

That means it is now up about 64% from that low, although the trading volume was very low at the trough. Moreover, SHIB is still cheap compared to its peak price on Oct. 27, when it briefly touched .0080 cents.

But year-to-date, Shiba Inu is still below par. It ended last year at .003366 cents. This means year-to-date, SHIB is down 6.6%. With the kind of volatility in the crypto market these days, that deficit could easily be made up within one day.

Most importantly, part of the reason it’s slowly drifting up is that Shiba Inu is gaining acceptance as a monetary transaction means.

Shiba Inu Gaining Acceptance

Shiba Inu was started anonymously as an Ethereum (CCC:ETH USD) based counterpart to Dogecoin (CCC:DOGE USD). Its main purpose is to act as a mode of monetary transaction. So far, it’s been able to rise above many other meme coins that have tried to mimic the success of Dogecoin.

In fact, as of Feb. 8, its market capitalization of $17.25 billion is just below the $20.9 billion market cap of Dogecoin. Dogecoin is the 12th-largest cryptocurrency by size according to CoinMarketCap, and Shiba Inu is number 13.

They are neck and neck now in terms of acceptance. For example, Coinbase (NASDAQ:COIN) recently listed Shiba Inu on its platform on Sept. 16, 2021. Coinbase is the largest cryptocurrency exchange, so its acceptance of SHIB was essentially the equivalent of a Good Housekeeping seal. The listing sparked a huge gain in the price of Shiba Inu.

On Jan 14, CoinTelegraph ran a story indicating there was a “rumor” that Robinhood (NASDAQ:HOOD) was considering accepting Shiba Inu. This was when Robinhood co-founder Vladimir Kardapoltsev recently commented on the rising number of SHIB token holders.

Moreover, companies are now beginning to accept SHIB as a means of payment for normal transactions. For example, on Jan. 7, AMC Entertainment (NYSE:AMC) said that its theaters were on track to accept Shiba Inu as payment by the end of the first quarter of 2022.

Where This Leaves SHIB

One can certainly understand the basic reason for the drop in SHIB. Most likely it’s the “FUD” factor: fear, uncertainty and doubt. Given the impending Federal Reserve rate increase, a possible Russian invasion of Ukraine and the huge selloff in stocks and major cryptos, the fear factor hit SHIB hard.

However, given that there is a high correlation between Shiba Inu and other major cryptocurrencies like Bitcoin (CCC:BTC USD), there is good reason to believe it could rebound.

Bitcoin is on the mend now, leading to a belief that Shiba Inu could improve as well. As of Feb. 8, it has risen to more than $40,000. I wrote last week that once BTC rose above the $40,000 mark, it would be seen as a major red line or turning point.

As a result, expect to see Shiba Inu follow suit along with Bitcoin. It is seen as a bellwether for the more speculative elements of crypto markets. SHIB basically has no inherent value other than what others say its value is. However, as more companies begin to accept it for trading and digital commerce, it may pick up real aspects of value.

In the end, Shiba Inu is a highly speculative cryptocurrency and is highly leveraged to Bitcoin. But as far as that goes, it seems to be on the mend now.

On the date of publication, Mark R. Hake did not hold any position (either directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.

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