Furry haired 'meme coin' enthusiasts rejoiced and seasoned investors rolled their eyes this week as the self-proclaimed "Dogecoin killer" Shiba Inu skyrocketed to the highest price it's been since its release in May. It's now sitting, at the time of writing, on AU$0.00004061.

But before we get into why Shiba Inu is blowing up, and whether it's too late to buy, first: what the hell is Shiba Inu?

Shiba Inu is one of a few new 'meme coins' on the block, which appears to have been inspired by Dogecoin’s heroic spikes (which began in Jan/Feb), when people started looking for the next Dogecoin (one they could get in early on this time).

Shiba Inu is far from the only one – plenty of developers have tried to riff off it (with catchy names and the like). Shiba Inu, however, is arguably the catchiest spinoff right now (Shiba Inu being the name of the breed of dog the Dogecoin meme is based on).

Shina Inu's origin story goes as follows: Russian-Canadian programmer and writer (and co-founder of Ethereum) Vitalik Buterin was, without his permission, gifted 50% of Shiba Inu's coins by its anonymous founder (who goes by the pseudonym Ryoshi), according to SHIB's white paper.

Buterin is a respected figure in the crypto space. However, this gave him the power to rug pull at any time. Which he promptly did – but not quite in the way you might expect. Buterin donated a huge number of Shiba Inu (as well as a couple other of his other coins) to help support India’s Covid relief cause.

This caused panic among investors and saw Shiba Inu's price plummet drastically soon after its inception. It's price dropped from just over 0.00004 to around $0.00001, and has hovered around the 0.00001 range for months. After a couple of mini price hikes in September, however, Shiba Inu's value has now started soaring in October. It is now worth $0.00004061 – more or less back to where it was before Buterin's charitable rug pull.

This week Shiba Inu holders have woken to see 50% price increases – and then last night 70% price increases – overnight.

These rises have come after billionaire entrepreneur Elon Musk posted a photo of his new Shiba Inu puppy with the caption, "Floki Frunkpuppy" on Twitter on the 4th of October.

Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf

— Elon Musk (@elonmusk) October 4, 2021

Elon has a history of playing with the crypto market, and many users seeked further clarification on his cryptic message (or non message, depending on how you view it).

Hello, it is floki coin or shiba inu ?

— KShop (@KogiShopp) October 4, 2021

Many supporters and holders of Shiba Inu, with a vested interest in seeing its price skyrocket, took this chance to generate hype and FOMO (as did fans of every coin which could conceivably be linked in any way to the Tweet).

Josh Gilbert, eToro's Australian market analyst, told DMARGE, "Shiba Inu (SHIB) has continued to gain support within the crypto community, especially as it hits over 1 million followers on Twitter. Despite being considered a 'meme coin', Shiba Inu’s biggest allure for investors is its basic fundamentals such as the decentralised exchange (DEX)."

"What’s the biggest catalyst for this recent increase? Elon Musk. Once again, Musk has moved the crypto markets, this time with the purchase of his very own Shiba Inu puppy called 'Floki', which he shared a photo of on his Twitter account."

"Whilst, [Elon's] tweet itself didn’t reference the Shiba Inu coin, it was enough to send his supporters flocking to buy the coin, therefore boosting its value."

Naturally, for the time being, the price has shot up, with Shiba Inu making it into CoinSpot's #1 'gainer' spot at certain points this week (it's currently the number 2 gainer across the entire market, with BTC Standa sitting at #1 at the time of writing).

But is Shiba Inu's growth sustainable?

Take this as a compliment or an insult (take your pick), but Shiba Inu is sustainable in much the same way Dogecoin is sustainable – it will last so long as there is people buying more of it. As long as there is hype and cult-like belief.

Although figures like Mark Cuban and Elon Musk like to pontificate about the potential real uses of meme coins (see video below, where Elon Musk calls Dogecoin the best medium of exchange), and though it is true that Dogecoin, for instance has quicker transaction speeds than Bitcoin, there is already a more serious segment of the crypto market dedicated to solving that problem and becoming the next Ethereum (see: Cardano). At this stage, there's nothing more than random Elon Musk tweets that suggest meme coins like Dogecoin – which was originally built to be unusable – are practical enough to go down that route.

Elon Musk & Mark Cuban talk about the potential 'real life' applications of meme coins – beyond just cash.

That said, Dogecoin saw some ridiculous highs earlier this year based on what some call idiocy, and what others call groupthink. And the same phenomenon could now be at play with Shiba Inu. So if you are happy to risk your money (and know you might not get it back) then Shiba Inu could be worth a flutter (much like a trip to the casino) and it could keep on booming for a bit, with bigger spikes potentially around the corner. Or it could just totally die off again and never see another spike after this one. Who knows.

So – to answer the question, 'is it too late to buy?', that really depends on whether the hype grows, or whether those that have just made serious money breathe a sigh of relief and cash out, and leave you holding the bag.

Josh Gilbert, eToro's Australian market analyst, told DMARGE the following, regarding Shiba Inu's price hike this week, and what could happen next (as well as providing a warning for investors).

"Due to the surge of interest, we are likely to see more exchanges begin to list the Shiba Inu coin and provide investors with the opportunity to gain exposure as it continues to climb the ranks of the crypto market cap list."

"Judging when to enter any asset, not just Shiba Inu, is always tricky and trying to time the market is nearly impossible. Investors shouldn’t just buy an asset because they have seen the price rise by 50 or 100 per cent. Instead, anyone considering investing should research the ideas behind the specific asset and understand the potential use cases. Adopting a strategy such as dollar-cost averaging can be a great way to manage risk when entering into an asset. On top of this, using risk management techniques such as stop losses can help lower risk."

"Ultimately, anyone investing in such assets needs to understand the risk. Crypto is a highly volatile asset class and eToro urges investors to remember the basic tenets of investing; diversify your holdings, understand what you are investing in and never invest more than you can afford to lose."

As for whether you can trust Crypto Market Caps he told DMARGE: "The crypto market cap is calculated by multiplying the total number of coins or tokens in circulation by the price of the coin or token."

"Fundamentally, market caps of cryptoassets can tell investors a better story than the price and allow for better comparisons across cryptoassets. For example, a cryptoasset such as Cardano (ADA) is listed at USD$2.20, however, it has a larger market cap than yearn.finance (YFI), priced at USD$32,300. Below is the calculation and an example (prices accurate as of 07.10.2021)."

• (Price) USD$2.20 X 32,025,787,327 (circulating supply) ADA = Market cap of USD$70,456,732,119.
• (Price) USD$32,200 X 36,638 (circulating supply) YFI = Market cap of USD$1,117,974,360

He added: "The market cap of a cryptoasset is a great metric for comparing the value of cryptoassets. In addition, it can help investors understand a cryptoasset’s stability, particularly for investors looking for less volatility and associated risk."

"Essentially, I’d argue we categorise cryptoassets like you would stocks: large caps, mid caps and small caps. However, as cryptoassets experience a lot more volatility, market caps are constantly changing. Therefore, anything over $USD10 billion would be considered large cap, which is reflected in the top 20 assets ranked by market cap."

Read Next

• I Bought $1,000 Of Crypto Currencies. It Was A Huge Mistake
• The Best & Most Exciting Cryptocurrency Investments You Need To Know

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The post Shiba Inu Is Absolutely Skyrocketing. Is It Too Late To Buy? appeared first on DMARGE.