Erik Weijers, a year ago

Woof! Shiba jumps up

Shiba Inu, the most hyped meme coin of the second half of 2021, is making a partial comeback. On February 7, the price reached a level that was over 100% higher than its recent low on January 22.

The Shiba Army is howling with joy on the socials as their beloved hunting dog is in the top 3 risers. And that's a feat over a seven-day period, and across the full breadth of the crypto market. In fact, of the top 20 coins, Shiba Inu is by far the biggest riser. However, SHIB is still miles away from its all time high of October 2021.

The reason for the pump? Not really clear. There is no news from the developer camp. A possible cause is the so-called "burn party" that Bigger Entertainment has announced. This coming Valentine's Day, Shiba holders will burn some of their SHIB coins together. Burning is a common way in crypto to curb inflation and thus keep the coin price high. The fact that this burning comes in the form of a party is special though. Normally, burning is part of the protocol for validating transactions.

About trading meme coins like Shiba and Doge

Trading meme coins like Shiba and Doge can be exciting but obviously not without risk. The prices are even more volatile than most other crypto currencies. Unlike the more "serious" crypto coins, the price is really only determined by sentiment - and that can turn on a dime.

The price of a joke

All this is not to say that meme coins are necessarily nonsensical investments. After all, sentiment is worth something too. The father among meme coins, Doge, was conceived as a parody of the dozens of shitcoins launched in the ICO mania of late 2017. The overall market value of Doge was, in a sense, the market value of that joke.

Also, the fact that Doge started as a joke, with no real-world applications, doesn't mean it will stay that way. Once there is a community around a coin, it becomes lucrative to build applications for it. For example, Tesla has started accepting payments in Doge.

But still. What makes meme coins even more elusive than other crypto is that sentiment can turn so quickly and people flee to another coin. Be picky about which wolf pack you join!

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