It’s been called a joke coin and a mere clone of Dogecoin (CCC:DOGE-USD). Lately, however, dog-themed altcoin Shiba Inu (CCC:SHIB-USD) has truly come into its own. Indeed, Shiba Inu has been generating more buzz than Dogecoin and many other cryptocurrencies.
It’s amazing to consider that an apparent joke token could attain prominence so quickly. Clearly, the joke is on the skeptics, who are probably now regretting their pessimism.
There’s still at least one well-known hedge fund manager who is critical of Shiba Inu, however. His argument is worth considering, even if we don’t have to agree with it.
Furthermore, the owners of the coin aren’t all small-scale traders. Indeed, you might be surprised to find out who’s controlling much of the price action, and knowing that could impact your trading decisions.
Analyzing the Shiba Inu Price
Amazingly, Shiba Inu recently surpassed Dogecoin to become the ninth biggest cryptocurrency in terms of market capitalization.
Some folks might call this event the “flippening.” Don’t be surprised, though, if Shiba Inu and Dogecoin flip back and forth for a while as the two tokens compete for supremacy.
One thing is for sure: Shina Inu has been volatile lately. After trading at just $0.000007 in late September, the coin jumped to $0.00003 in early October.
You might have to adjust your eyes to all of those zeros. Trust me, though, when I tell you that a move from $0.000007 to $0.00003 represents a massive gain.
And it only gets wilder from there. In late October, the coin catapulted to $0.00009. However, the coin’s owners shouldn’t be complacent, since altcoins can move down as quickly as they go up.
Some folks learned this lesson the hard way, as Shiba Inu fell to $0.00005 in early November.
What caused this sudden plunge? We can only speculate, but as we’ll see, it’s possible that this dog is being controlled by a few whales.
Is It Pointless?
If you’re not familiar with hedge fund manager Michael Burry, I recommend that you watch the movie The Big Short.
Burry and his bet against the U.S. housing market in 2008 was profiled in that fascinating film. Of course, that bet turned out to be a very smart move.
Now Burry is issuing a different warning – and some altcoin holders might not like his viewpoint very much. Still, we should at least consider Burry’s argument. After all, he made a good call in 2008, right?
Apparently, his issue with Shiba Inu is that more than 1 quadrillion of the coins exist. That’s 1,000 trillion, by the way. Or, to quote Burry, “One quadrillion days is 2.7 trillion years, or all of time, from the beginning of the universe, multiplied by 71,000.”
Burry wrote that in a tweet which has since been deleted. He also wrote, “In other words, pointless,” in reference to Shiba Inu and its large supply.
Let’s Do Some Whale Watching
While Burry’s concern might hold weight, keep in mind that the coin’s huge supply is more of a long-term issue , so Shiba Inu could still rally in 2021 and 2022. A more pressing near-term matter is the coin’s quick price decline, which took place in early November.
It’s hard to know for certain what caused that plunge. Yet it has been reported that over 40 trillion coins were moved from the wallet of an owner of Shibu Inu to four crypto wallets. Apparently, it’s been suggested (though I can’t prove it) that this “whale” once turned an investment of $8,000 in Shiba Inu into roughly $5.7 billion.
“If he decided to sell these bags, SHIB would plummet -99.99% to zero. Oof,” tweeted financial analyst Jacob Oracle.
Moreover, the ownership of Shiba Inu seems to be highly concentrated among the big-money whales, as the top ten of them reportedly own nearly 72% of the coin.
Thinking Big, Trading Small
So now you have to decide whether to make a move based on this alleged information, some of which is difficult to verify. One approach is to watch for large “block” trades of Shiba Inu.
If you see reports of trillion-token purchases or sales, that could be a cue to place your own small-scale trade. You’d be swimming with the whales, so to speak. And with that strategy, the minnows can make some money, too.
On the date of publication, David Moadel 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.
