Shiba Inu (CCC:SHIB-USD) is a relatively new cryptocurrency, which its website refers to as a “decentralized meme token that evolved into a vibrant ecosystem.” For the cat lovers out there, Shiba Inu is a breed of hunting dog from Japan. And a meme coin is a cryptocurrency that has exploded in popularity thanks to the online musings of retail investors and influencers.
Shiba Inu wants to be more than a short-lived internet phenomenon. It intends to develop a robust community with decentralized finance applications. Its website points to some charity work as well.
This is all well and good. However, the main appeal of Shiba Inu is trading profits. Shiba rose to prominence by playing off Dogecoin (CCC:DOGE-USD), which has been one of 2021’s biggest cryptocurrency success stories. Shiba, leveraging the power of an extremely low-priced token, managed to generate substantial trader interest. Unfortunately for it, a newer dog-based cryptocurrency may considerably diminish Shiba Inu’s appeal.
Floki Inu Threatens Shiba Inu’s Popularity
Floki, in case you’re not familiar, is Musk’s new Shiba Inu puppy. It’s also a brand-new cryptocurrency. Some smart folks capitalized on the excitement around all things Musk to set up a cryptocurrency devoted to his dog.
The project is named Floki Inu (CCC:FLOKI-USD). Its website describes it as “the new community owned meme coin,” telling owners to watch it “fly to Mars!” One of the benefits touted on the site is that the altcoin is hyper-deflationary and gains in value from transactions that occur in the ecosystem.
Will Floki Inu become a relevant, long-lasting cryptocurrency asset? Probably not.
However, it’s certainly an issue for traders holding Shiba Inu. Shiba, after all, was a way to ride the coattails of the Dogecoin phenomenon. Now, in an Inception-style maneuver, the Floki community is seeking to steal thunder from Shiba Inu.
In a cryptocurrency world with so few barriers to entry, it’s hard to maintain focus on any one particular meme token. It’s easy to create a newer, flashier meme, and, in doing so, destroy value for everyone else.
Floki’s Meteoric Rise
The price of the Floki token had been rising prior to Musk’s tweet, ticking up on steadily mounting trading volume. Things accelerated sharply, though, after Musk published his pup’s photo earlier this week. Floki Inu soared roughly 1,000% in a 24-hour period.
Shiba Inu, by contrast, has been in a declining trend since August. The meme coin rallied today following its listing on cryptocurrency trading platform Binance. However, it remains to be seen whether this will be enough to put it back in the spotlight.
Shiba is much larger than Floki by market capitalization, to be sure. But I expect Floki will continue to steal attention away from its (slightly) older sibling.
The Bottom Line on Shiba Inu
Simply put, there are too many meme cryptocurrencies to keep up with. If the only dog-based crypto was Dogecoin, perhaps it would have value on a scarcity basis. Dogecoin has certainly remained relevant far longer than most analysts expected.
Now, however, traders have to grapple with numerous ways to play dog-related meme assets. Within cryptocurrency proper, coins like Shiba Inu and Floki Inu compete for attention. And related fields, such as non-fungible tokens (NFTs), offer all sorts of ways to incorporate canines as well.
This is a discussion of memes because there’s little else to support Shiba Inu. The odds of it gaining a strong developer community or widespread real-world adoption are quite low. So, to maintain any reasonable value, Shiba Inu has to stay popular on social media. But with thought leaders such as Elon Musk shifting their attention all the time, it will be easy for Shiba Inu to get lost in the shuffle.
On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions 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.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.