Doge, Shib, and the Meme Economy
Doge, Shib, and the Meme Economy
Hey everyone,
Social media is abuzz with talk of Shiba Inu coin, which enjoyed an explosive rally throughout October.
Shockingly, the so-called “Dogecoin killer” surpassed Doge in marketcap at the end of the month to become the 9th largest cryptocurrency in the world.
In the long run, Shib is unlikely to replace Doge, but its rise is another sign that meme-backed assets are more powerful than anyone imagined.
Let’s take a look at what Shib’s rise means for Dogecoin and the growing meme economy.
Shib makes its move
Shiba Inu coin made its move in October, vaulting into the top 10 cryptocurrencies with an explosive 800%+ rally.
More surprising: Shib passed Doge last week to become the 9th largest cryptocurrency by market cap.
Doge regained the upper hand a day later, and the two have been trading spots since.
To varying degrees, pro-Doge businesses like Coinbase, AMC, Public, and Robinhood are contemplating embracing Shib.
What is the meaning of Shib's rise?
Shib and the Meme Economy
Shiba Inu coin originally marketed itself as a "Dogecoin killer."
Shib is unlikely to replace Doge as a digital medium of exchange.
Instead, its emergence could be a sign that there is more demand for meme assets than previously thought.
The meme economy is one of the newest, most exciting, and least understood markets in the world.
Something can be considered part of the meme economy if its value depends at least in part on the sharing of internet memes.
Bitcoin uses memes to help preserve its value. Memes like BTFD, few understand, HODL, FOMO/FUD, and laser eyes are shared units of culture that allow Bitcoiners to speak an insider language, strengthening their collective conviction in Bitcoin's value and helping them to navigate unpredictable markets.
Cryptocurrencies like Dogecoin and Shib are more overt in their dependence on memes because (so far) they haven't attempted to solve technical problems—their main argument for existing is to spread fun, hilarious memes. As a result, they have been dubbed "memecoins."
Non fungible tokens are another meme-based asset. Digital artists can use NFTs to make their works into unique, collectible memes.
Stocks can be part of the meme economy too.
Arguably, Berkshire Hathaway is an OG meme stock in the sense that it suggested a worldview centered on a mythical oracle and an annual pilgrimage to Omaha.
More recently, stocks like GameStop and AMC have built communities around the sharing of a core set of memes.
For the AMC/GME Apes, hedge funds (hedgies or suits) short the stocks relentlessly, while retail investors hold shares with diamond hands in anticipation of the MOASS (Mother Of All Short Squeezes).
Despite skepticism from the legacy financial world, the meme economy has been on fire in 2021, delivering one stunning success after another.
Shib's rise is a sign that the monetization of memes isn't slowing down.
The art of pricing memes
Sometimes, media claims that meme assets are intrinsically worthless.
If Dogecoin has proven anything over the last year, it's that memes can have real monetary value, though they are often difficult to price accurately.
Wild swings in valuation are the norm for meme assets.
When a meme goes viral, it's common for a corresponding asset to achieve an exponential increase in price as millions become aware of it overnight.
The lure of extraordinary profits also attracts scammers to the meme economy.
A recent example is Squid Game Token, named after the popular South Korean Netflix series.
Squid Game memes have become extremely popular on social media, making the series a natural fit to be monetized in the form of a token.
After briefly reaching a price of $2,800, Squid Game Token was rug pulled, crashing to $0 in a matter of minutes.
When pricing assets in the meme economy, the Lindy Effect is an important tool.
According to the Lindy Effect, the life expectancy of non-perishable things like memes and ideas is proportional to their current age.
In other words, the longer a meme has been around, the longer it is likely to survive into the future.
Among memes, competition for survival is fierce. Their average lifespan is roughly four months.
Compared to most memes, Doge is a venerated elder. The Doge meme first became popular in 2013.
By surviving for eight years, Doge has already proven to be one of the most evolutionarily fit internet memes of all time.
The Lindy Effect suggests that, for this reason alone, Dogecoin is more likely to persist into the future than other meme assets.
Just as the US Dollar is backed by America's unparalleled military might, Dogecoin is backed by some of the most powerful memes in existence.
In the meme economy, Doge is as close to a sure thing as you can get.
Come at the king, you best not miss
Shiba Inu coin is an interesting test of the Lindy Effect: is it possible for a new meme to piggyback off the success of an older one?
Shib is unlikely to win as a "Doge killer," but might succeed as an "alt-dogcoin."
Adoption from Coinbase and, potentially, AMC and Robinhood is the best evidence that Shib could be gearing up for the long haul.
Shib also benefits from being extremely cheap: it's possible to buy hundreds of thousands of Shib for twenty bucks.
Unit bias—the psychological lure of owning a large number of units—could continue to be a draw among retail investors.
Part of what has made Dogecoin a successful cryptocurrency is the non-tribalism of its community.
Many Doge holders also own Shib, which could take on a role as a cheap Doge the same way Doge has attracted investors who feel priced out of Bitcoin.
Moving forward, a few important questions remain about Shib's fate.
Shib whales are mostly unknown, though by one estimate they control 80% of total supply. If they decide to sell their holdings, will there be enough retail demand to keep the price afloat?
Similarly, if investors take profits on Shib and reinvest them into Doge, Doge could recapture some of Shib's current market share.
If Shib rug pulls, it would go down as one of the largest crypto swindles of all time, and could be used by media to cast undeserved aspersions on Doge. In this sense, Shib is more of a threat to Doge if it fails than if it succeeds.
Another important consideration is that Doge is buoyed by support from Elon Musk, Vitalik Buterin, and Mark Cuban.
At the moment, Shib lacks similar big-name backers, with both Vitalik and Elon declining to attach their names to the project.
Finally, Tesla's crypto plans could prove an inflection point for Shib and Doge.
Currently, Tesla doesn't accept any crypto payments, but anticipation continues to build that they will resume accepting Bitcoin, and could start taking Dogecoin too.
Earlier this week, Tesla's website was found to contain inactive code with the words "BITCOIN" and "SHIBA" under payments.
Is Elon really planning to accept Shib as payment? Or was he just trolling?
After promoting Doge for nearly a year, it's unlikely Elon would pivot to Shib without warning.
Most likely, he or his team was using the word as a cipher for Dogecoin.
Whenever Tesla makes their next crypto announcement, it'll be fun to see how the meme economy reacts.
Memenomics
Shiba Inu coin took the world by storm in October, reaching a larger market cap than Deutsche Bank.
Shib was originally marketed as a competitor to Dogecoin. If it succeeds in the long-run, it'll likely be as a friendly complement to Doge.
A number of questions remain, and the remainder of the year will be crucial for determining Shib's fate.
No matter what happens with Shib, Doge, and other meme assets, the overwhelming trend is clear: the meme economy is here to stay.
Dogey Treats: News Bites
Robinhood is teaming up with Burger King for a crypto giveaway sweepstakes. BK plans to give away 20 Bitcoin, 200 Ether and 2 million Dogecoin.
Dogecoin developer Michi Lumin is spearheading an effort to set up a Dogecoin node using Starlink.
The Dogecoin Core 1.14.5 upgrade, which will further reduce fees, is days away from being released.
Greg stepped down as fake Doge CEO. Elon volunteered to be greg's successor. Billy Markus chose Kabosu as CEO, Elon as Chairman of the Board, and Floki as President.
Elon tweeted he was considering opening Texas Institute of Technology and Science and accepting Dogecoin for tuition.
The original Doge, Kabosu, turned 16 years old.
YouTubers Mr. Beast and Mark Rober launched TeamSeas, an effort to remove 30 million pounds of trash from the ocean. They partnered with the Doge community to raise over 50,000 Doge.
Crypto Dad: money is too important to be left to central bankers.
Aaron Rodgers partnered with CashApp to take a part of his salary in Bitcoin.
Nike posted virtual design jobs, suggesting it was preparing to join the metaverse.
Memes of the week
Thank You!
Thanks for reading! Consider sending a tip or Super Following on Twitter to help keep the newsletter going!
Doge: DHA5831Aoh2CVhBdX8rAv74kEGzqDg9BUx
It's ALL Risky!
Thank you, kind reader, for reading and subscribing to this newsletter. I really appreciate it!
If you haven’t already, please sign up to this email newsletter for more weekly articles like this one. Also, please share it with a friend or on twitter if you enjoyed this article.
What do you think? Is the meme economy big enough for both Doge and Shib? Let me know!
Remember, Dogecoin is risky. But then again, it’s all risky!
Follow me on twitter at @itsALLrisky
Email me at itsALLrisky@gmail.com
Send a Doge tip: DHA5831Aoh2CVhBdX8rAv74kEGzqDg9BUx
This article was written in collaboration with @CryptoDogDivine, give them a follow!
Don't forget to subscribe to this newsletter!
Disclaimer: This is not financial advice and I am not a financial advisor. The article above references an opinion for entertainment purposes only and it is not investment advice. Do your own research and consult with a licensed financial adviser before making any investment decision. Do not treat any opinion expressed in this newsletter as a specific inducement to make a particular investment. Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or cryptocurrency or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, cryptocurrency, or financial product does not guarantee future results or returns. Dogecoin is a speculative and highly volatile asset susceptible to pump-and-dump schemes.
Disclosure: I currently own some Dogecoin, Bitcoin, and Ethereum. At the time of publication, Dogecoin is around $0.27 per coin.