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Is Musk’s Tweet the Only Factor Bringing SHIB Eye-Watering Gains?
12 October 10:50
【TL; DR】
Musk tweeted a picture of his dog Floki on October 4th, causing SHIB price to soar over 3X.
Musk has been tweeting about Shiba Inu since May this year.
The India Crypto Covid Relief Fund converted the entire donations from Vitalik into stablecoins.
Crypto whales’ large-scale purchases have also been a major driver of SHIB prices.
[Keywords] SHIB, Elon Musk, Crypto Whales
Since October, Shiba Inu (SHIB) has risen by 337% in price. The market cap of the SHIBA INU pushed past $10 billion, reaching a maximum of $14 billion. According to Coinmarketcap, it currently ranks 20th by market capitalization, outperforming many popular projects such as Polygon, Filecoin, and Cosmos among others. This price pump was instigated by a tweet from Tesla CEO Elon Musk.
On October 4th, Musk tweeted a picture of his dog Floki, sending waves of enthusiasm to SHIB fans. In addition, the overall bull run in the crypto space and the U.S.’s tolerant regulation towards cryptocurrencies have fueled the spike in SHIB prices.
What is SHIB?
Released in August 2010, SHIB is an Ethereum-based ERC-20 token that has been dubbed a “DOGECOIN KILLER”. And just like DOGECOIN, it is also a meme coin. According to SHIBA INU, the inspiration behind the creation of SHIBA Inu stems from the fact that Shibas constantly forget where they bury their treasure.
ShibaSwap, the DEX of the Shiba Inu Ecosystem, was launched on 10th July 2021. It replicated the strategy adopted by the Sushi Exchange. ShibaSwap sets the trading fee at 0.3% while giving users additional BONE tokens as rewards. After the release of the first token(SHIB), the Shiba Inu community released two more tokens into the ecosystem; Leash and Bone. The total initial circulating supply of SHIB is as high as 1,000 trillion, with a low price per unit. Anyone can easily purchase hundreds of millions or even trillions of SHIB coins. On social media, Shiba Inu has a group of loyal community members who call themselves the “Shib Army” and claim that they will hold SHIB for a long time to achieve financial freedom.
According to their white paper, Shiba Inu was created as "an experiment in decentralized spontaneous community building". At the beginning of the project, Shiba's founder gave half of SHIB's issuance (500 trillion coins) to Vitalik Buterin's private wallet on Ethereum(note: Vitalik Buterin is the creator of Ethereum). When the Covid-19 pandemic in India got out of control in May this year, Vitalik Buterin burned 90% of SHIB tokens in his wallet and sent the remaining 10%(worth an estimated $1.2 billion) to the India Crypto Covid Relief Fund which was launched by Polygon founder Sandeep. This caused SHIB’s price to plummet 40% for a short time after the donation. However, Sandeep said that the SHIB Community was responsible for the relief fund and generous donations. This gives peace of mind to all SHIB holders.
SHIB has remained relatively stable in price since the plunge that was driven by the donation mentioned above. According to the India Crypto Covid Relief Fund, as of September 24th, the foundation had converted all of the donations from Vitalik into about $464 million worth of stablecoins, some of which were used to purchase more than 15 million doses of Covid-19 vaccines. Prior to this Musk tweet, SHIB saw a price spike that was close to May’s price high.
Was Floki's Picture the Only Trigger for the SHIB Buying Frenzy?
Musk has always been a "dog lover" regardless of whether or not he's supporting the Shiba Inu coin. He has been tweeting about Shiba Inu since May this year. On May 7th, Musk tweeted a reply saying that he was considering adopting a Shiba as a pet. On June 25th, he named his Shiba, Floki (the name of the character in the Vikings). On September 13th, his pet Floki finally arrived home.
On October 4th, he tweeted another reference to his beloved Floki, which triggered a price spike for SHIB. Interestingly, on the same day when Musk named his dog Floki, several projects with the same name were launched (e.g. Floki Inu). Floki Inu jumped over 50% in price, but then quickly pulled back. Obviously, Musk's tweet was the trigger for this price action, but it was far from the only reason.
The negative effect caused by the donation(as mentioned above) had finally ended as the India Crypto Covid Relief Fund converted the entire donation from Vitalik into stablecoins. In the long run, this SHIB-based donation became a massive positive for SHIB, creating lots of hype in the crypto space. In the last two weeks, the number of addresses holding SHIB has increased by more than 30,000. Many crypto whales have also bought this token. According to Whale Stats, a whale bought $43 million worth of SHIB coins on September 30th. Another whale bought a total of 276 billion tokens in three separate purchases on October 3rd. After the price soared, an ETH whale named "Light" purchased SHIB worth up to $6.5 million on October 7th. Overall, the whale effect has also been a major driver for the SHIB price.
Conclusion
In the crypto world, investors are always looking for coins which are set up to increase in price. SHIB was born with the label of being a "DOGECOIN KILLER", which sounds slightly amusing but also draws a lot of attention. Its price has dropped slightly from its recent high, but it is still performing incredibly well. Whether the price will reach a new high or drop again depends on the results of the long and short positions, so let's wait and see.
All users are welcome to trade SHIB and Floki on Gate.io:
Trade SHIB: https://www.gate.io/en/trade/Shib_USDT
Trade Floki: https://www.gate.io/en/trade/Floki_USDT
Author: Ashley. H, Gate.io Researcher
*This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.
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