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Chinese Traders Pounce on SHIB Coin Known as ‘Doge Killer’

Watch out, dogecoin: A new digital token trending (and price pumping) in Chinese cryptocurrency circles is billing itself as the “DOGE killer.”

The new SHIB token has unabashedly coopted the name of the Shiba Inu dog breed whose image has come to represent the joke cryptocurrency dogecoin. Perhaps as menacing, SHIB has just garnered fresh listings on the three most popular cryptocurrency exchanges among Chinese users, Binance, Huobi and OKEx.

And this puppy is all of a sudden garnering astonishing investment from Chinese traders, even though they seem well aware that the project appears to have no earnest technological promise. On Monday, when Binance launched trading in the SHIB token, the price nearly doubled on Huobi, where it was already trading.

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That’s despite Chinese traders being as likely to call it “s**tcoin” in their local language, as SHIB coin.

The new obsession shows the extent to which the recent dogecoin phenomenon – where money seems as playful as a slobbery toy – has spread to denizens around the world. Traders seem happy enough to go along as dogecoin’s price pumps and dumps repeatedly, often timed to a fresh tweet from billionaire Elon Musk. Over the past weekend, Musk mentioned dogecoin multiple times when he hosted “Saturday Night Live.” The DOGE price has tumbled 29% in the past two days.

“SHIB’s price performance over the weekend clearly shows that the crypto industry hasn’t had its fill of canine-themed meme coins just yet,” Rick Delaney, senior analyst at OKEx Insights, said.

‘Billions or even trillions’

OKEx listed the SHIB coin on May 8, just a few days ahead of Binance. Huobi has the most trading volume of SHIB, according to CoinGecko. A Huobi spokesperson didn’t respond to CoinDesk’s request for comment by press time.

The Shiba Inu coin, as the SHIB token is formally known, has a price so low, at $0.00002766, that the project’s backers say it “allows users to hold billions or even trillions of them.”

The price “can remain well under a penny and still outpace dogecoin in a small amount of time,” according to the token’s website.

“SHIB is an experiment in decentralized spontaneous community building,” the website continues. “BONE is our next token!” There’s a even link to a “woofpaper,” dated April 29.

The website goes on to recite some surprisingly sophisticated crypto-industry insider references:

“We locked the 50% of the total supply to Uniswap and threw away the keys,” the website added. “The remaining 50% was burned to Vitalik Buterin and we were the first project following this path, so everyone has to buy on the open market, ensuring a fair and complete distribution where devs don’t own team tokens they can dump on the community.”

A market cap of… ?

It should be noted that the website offers no identifying information about any individuals associated with the project. And as cryptocurrency professionals know, the digital-asset industry is replete with scams. So investors should exercise caution.

On CoinGecko, a cryptocurrency pricing website, the total market capitalization of SHIB is given as a question mark, with a maximum token supply of 1 quadrillion.

No professional cryptocurrency analysts in China expressed confidence to CoinDesk about any fundamental reasons for SHIB’s bounding price.

Such admonishments appear to have done little to dissuade traders.

Binance temporarily suspended all withdrawals on its exchange after the listing, according to a tweet on its official Twitter account. The speculation was that the suspension was caused by the sudden traffic from SHIB trading.

The price pump “is made possible because this token is so cheap that even a single retail investor can buy a few tokens with no trouble,” Colin Wu, a popular Chinese crypto industry blogger, told CoinDesk. In China, “there is a mood that people believe its price would go up.”

A billionaire influencer

The sudden popularity of SHIB appears to be partly the handiwork of social-media influencers on popular Chinese platforms, including Weibo and WeChat.

Charles Xue Biqun or Xue Manzi, a billionaire venture capitalist and one of the most active investors in the Chinese internet industry, has mentioned SHIB in multiple posts on Weibo to his more than 11 million followers. He has also been actively talking about dogecoin, according to his Weibo feed.

“Doge No. 2 hits new all-time highs, almighty,” he wrote in a Weibo post dated May 8, with screenshots of SHIB/USDT and DOGE/USTD pairs on crypto exchange Huobi.

“Doge has already gone up a lot,” Alex Zuo, vice president of China-based crypto wallet Cobo, said. “It gives an example of the ‘wealth-making effect.’ Plus that Shiba inu coin may also benefit from the localization…. With all the promotions by influencers on Weibo.”

“We find it very inexplicable,” Zuo said. “I didn’t buy any SHIB and no one around me has bought any.”

Bitcoin vs. Ethereum: Which crypto is the better 2021 investment?

TipRanks

Cryptocurrencies like Bitcoin and Ethereum are increasingly being favored by investors in spite of their volatility. Cryptocurrency is an internet-based digital currency that is not under the control of any central authority and uses blockchain technology for decentralized, transparent transactions. According to a Facts and Factors market research report from April, the global cryptocurrency market is expected to be worth more than $5,190.62 million by 2026. The market was worth $792.53 in 2019, indicating that the cryptocurrency market is expected to grow at a compounded annual growth rate (CAGR) of 30% between 2019 to 2026. Using the TipRanks Stock Comparison tool, we will compare two cryptocurrency mining companies, Riot Blockchain and Marathon Digital Holdings, and see how Wall Street analysts feel about these stocks. Riot Blockchain (RIOT) Riot Blockchain is a bitcoin mining company based in the United States and is expected to announce its Q1 report on May 17. The company’s bitcoin mining facility is located in Massena, NY. Last month, Riot provided an unaudited bitcoin (BTC) production and holdings update. In the first quarter of this year, Riot produced 491 bitcoins, 75% more than its pre-halving production in Q1 last year. Bitcoin halving is the process of reducing the rewards earned for bitcoin mining after each set of 210,000 blocks mined. This is done to ensure that the quantity of bitcoin in circulation does not rise exponentially. As of March 31, Riot had 1,565 bitcoins on its balance sheet produced by the company’s mining operations. On April 7, Riot entered into a contract with Bitmain Technologies to purchase 42,000 S19j Antminers for a price of $138.5 million to increase its Bitcoin mining hash rate to 5 exahash per second (EH/s) by the end of this year, and 7.7 EH/s by the end of 2022. Hash rate measures the processing power of the bitcoin mining network. Riot expects to achieve this hash rate with a fleet of 81,146 Antminers, of which 95% will be S19 Pro Antminers. Last month, Riot announced the acquisition of Whinstone in a cash-and-stock deal valued at $651 million. This included $80 million in cash in addition to 11.8 million RIOT shares based on the closing price of $48.37 as of April 7. The acquisition is expected to close in the second quarter of this year. Whinstone owns and operates the largest Bitcoin hosting facility in North America in terms of total developed capacity. The company’s facility is based out of Rockdale, Texas, with a total power capacity of 750 MW. (See Riot Blockchain stock analysis on TipRanks) Last month, H.C Wainwright analyst Kevin Dede reiterated a Buy and a price target of $64 on the stock. Dede said in a note to investors, “We also suggest examining EBITDA as a proxy for this year’s operating cash flow. We estimate this figure could fall in the $160 million range, implying a 26x EV-to-EBITDA multiple, that is more reasonable. Lastly, Riot’s sales are expected to expand roughly 17-times to $205.3 million versus last year’s $12.0 million, while EPS is expected to grow to $1.95 from ($0.30) last year on a GAAP basis, suggesting a P/E-to-growth ratio that falls below 1.0x.” However, Dede also underlined the risk involved in investing in RIOT and said, “An investment in Riot Blockchain is not without a significant level of risk that includes the speculative nature of bitcoin itself, the limitations of its financial strength in competing against larger, better capitalized mining operations, and the correlated dilution associated with any capital raise, among many others highlighted in Riot’s recent SEC documents.” Dede’s price target of $64 indicates upside potential of around 104% from current levels. Marathon Digital Holdings (MARA) Marathon Digital Holdings is another bitcoin mining company in North America. Earlier this month, Marathon became the first company to produce bitcoin (BTC) in a manner that is compliant with the U.S. Department of the Treasury’s Office of Foreign Asset Control’s (OFAC) standards and anti-money laundering (AML) regulations. As a result, the mining pool will not process transactions from people listed on the US Department of Treasury’s Specially Designated Nationals and Blocked Persons List (SDN). On May 1, Marathon began directing 100% of its hash rate to the new mining pool and in the first quarter of next year, Marathon expects all 103,120 of its miners to be deployed. The company expects a hash rate of 10.37 exahash per second (EH/s) to be directed to this mining pool by the first quarter of next year. On June 1, Marathon’s mining pool will begin accepting other BTC mining companies based in the United States. According to the company’s business update for the month of April, the company produced 162.1 new bitcoins, taking its total bitcoin holdings to 5,292 with a fair market value of $305.2 million. Marathon has received 13,032 S-19 Pro ASIC miners year-to-date from Bitmain. The company had around $204.4 million cash on hand with total liquidity, including cash and bitcoin holdings of $509.6 million at the end of April. Marathon has ramped up its active mining fleet to 12,084 miners, generating a hash rate of 1.29 EH/s. Marathon’s CEO, Fred Thiel said, “April was an incredibly productive month as we brought 5,288 new miners online and increased our active mining fleet’s hashrate approximately 82% in just 30 days. As a result, by the end of April, we were producing nearly 7 bitcoins per day, up from 3.2 bitcoins per day at the end of March.” “New miners continue to be delivered and installed on a daily basis, and as they come online, these production figures will continue to improve as our business scales into one of the largest enterprise Bitcoin mining operations in North America,” Thiel added. Marathon is aiming for monthly revenues of $103 million by the first quarter of next year by increasing the mining power or the hashrate of BTC and reducing the costs of production. The company has also partnered with Beowulf Energy to reduce the electricity costs involved in mining BTC. Marathon expects data center management and electricity costs to decline 38% to $0.034 per kilowatt-hour (KWh). (See Marathon Digital Holdings stock analysis on TipRanks) Last month, H.C Wainwright analyst Kevin Dede reiterated a Buy and a price target of $50 on the stock. Dede said in a research note to investors, “Some conservatism in our assigned multiple exists in reflecting the corresponding deployment risk to which Marathon may be exposed in its Montana location compounded by the overhang created by the necessity for another location to power the miners already ordered—the announcement of Marathon’s next destination should alleviate some uncertainty.” “One of the most important relationships, we think, is the company’s alliance with privately-held Beowulf Energy LLC and that company’s commitment to dedicating 500 MW of power to cryptocurrency mining,” Dede added. Dede’s price target of $50 indicates upside potential of around 72% from current levels. Bottom Line The rising interest in cryptocurrencies and an increase in the number of transactions conducted using cryptocurrency could stand to benefit both RIOT and MARA in the years ahead. According to H.C Wainwright analyst Kevin Dede, both stocks appear to indicate significant upside potential over the next 12 months. That being said, currently, Dede appears to be more bullish on RIOT’s long-term growth prospects.