A quick look at the meme coin space will show that more tokens are being issued than ever before. Although the asset class was controversial when it launched, it has seen one success story after another, and investors are certainly taking note. As Alan Draper explains, consumers are constantly looking for the next coins that will explode in value. But as new meme coins become highly coveted, a more established token appears to be in trouble.
Shiba Inu, which is one of the most well-known dog-themed tokens, has seen a record burn rate, as well as a significant drop in value. For the week ended September 21, 2024, the token was trading at $0.00001442, a far cry from its yearly high of $0.00003541 and an 83% decline from its all-time high.
The decrease in interest in the token is particularly notable given its performance in the futures market. Shiba Inu’s open interest in the market is estimated at around $24 million, a massive drop from the $137 million recorded earlier this year. Finally, we must consider the burn rate of the token, which jumped 440% in just 24 hours.
At first glance, this seems confusing. After all, Shiba Inu has the kind of recognizability that other coins can only dream of and is considered second only to Dogecoin itself. Why then is its performance so poor?
Much of this is attributed to the expansion of the coin space. A few years ago, there were only a handful of major coins that investors could turn to. But 2024 was a particularly good year for meme coins as several profitable coins were launched. From PlayDoge For Pepe Unchained, coin presales raised millions and became one of the hottest projects in the industry.
It’s also worth noting that tools like Pump.fun and SunPump have popped up, making it easier for users to launch their own coins. It’s no secret that the crypto industry offers more investment opportunities than ever before and many investors are more attracted to shiny new options than established tokens like Shiba Inu.
The asset is in an interesting place where its price has been falling and could break out above crucial resistance points over the next few months if there is no trend reversal. At the same time, Shiba Inu remains the second most valuable coin in the industry and could very well see a recovery in late 2024.
THE industry moves in cycles and in the event of a market contraction, investors could turn to proven options like the Shiba Inu. There is also the
possibility of the token getting its own spot ETF, which would allow it to follow in the footsteps of Bitcoin and Ether and benefit from the price.
Only time will tell if this is a temporary setback or the beginning of the end for the Shiba Inu.