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What’s behind Shiba Inu coin’s stunning rise—up 777% in 30 days

October 27, 2021, 7:45 PM UTC

What has a bigger market cap than General Mills, HP, or Nokia?

Would you believe it’s dog-theme cryptocurrency Shiba Inu? It’s true. After a crazy run, Shiba Inu now has a market cap of $38.5 billion. As Chris Morris wrote for Fortune: “The crypto that was long dismissed as a joke is up 777% in the past 30 days and hit an all-time high Wednesday amid talk that Robinhood might be considering listing it. That has boosted its market cap to a level that puts it alongside some of the biggest companies in the world—and in many cases, surpassing them.”

What is Shiba Inu coin?

As my colleague Grady McGregor explained recently, “The SHIB coin was created in August 2020, but little is known about its founder, who goes by Ryoshi. Ryoshi has promoted the coin’s ‘Dogecoin killer’ nickname, arguing that SHIB’s technology is more ‘community-driven’ than its counterpart, which uses the Shiba Inu as its mascot. And Ryoshi has heralded its minuscule worth. ‘We have the ability to outpace the value of Dogecoin, exponentially, without ever crossing the $0.01 mark,’ the founder wrote in a SHIB ‘woofpaper,’ better known as a white paper.” 

Ryoshi, in the paper, says that the coin—along with the “Shiba Inu ecosystem” that includes the ShibSwap exchange and a decentralized Shib Army of developers, coin holders, and fans—was an experiment in “spontaneous community building.” Ryoshi says in the paper that Shiba Inu are “incredible dogs” and encourages people to donate to the Shiba Inu Rescue Association.

What’s the Shiba Inu/Dogecoin connection?

You have to go back to 2013 to understand the roots of the current craze.

As my colleague Robert Hackett wrote earlier this year, “Dogecoin is a cryptocurrency that was developed as a joke at the end of 2013. The digital coin attracted an online community, largely drawn to its sheer ridiculousness.”

Dogecoin is based on an old internet meme that became popular in 2013: Doge, an image of a quizzical Shiba Inu, overlaid with fragments of English in multicolored Comic Sans typeface. The bits of speech—”wow,” “so doge,” “such meme”—narrate a silly, imagined interior monologue of the dog, which gushes with wonder.

Jackson Palmer, an Australian software developer and Adobe product manager, co-opted the meme in creating his cryptocurrency spoof. Palmer left the project in 2015 and has since warned about how speculators have abused Dogecoin “to scam people out of money.”

In May, my colleagues Grady McGregor and Yvonne Lau dove deeper into the surging new coin. They wrote, “The SHIB coin lived in relative obscurity from August until earlier this year, when a surge in interest for Dogecoin drove traders to find the next big thing. ‘[SHIB coin’s] rise has obviously been due to Dogecoin’s success,’ says [David] Hsiao,” CEO of crypto magazine Block Journal.

Dogecoin’s meteoric rise can be traced, in part, to fallout from the GameStop saga in March, as individual retail traders who fueled GameStop’s rise turned to joke cryptocurrencies. Periodic tweets in support of Dogecoin from Tesla CEO Elon Musk also helped it gain legitimacy.

At the time a single SHIB coin was nearly worthless—less than $0.000029 in mid-May—”but its trading surged…after it was added to cryptocurrency trading platforms OKEx and Binance. Chinese traders have helped propel SHIB’s rise, with the Chinese-founded exchange Huobi, which is popular among Chinese traders,” they wrote.

Shiba Inu and Robinhood

The currency got another big boost this week when rumors began circulating that it might be added to stock trading app Robinhood. According to Bloomberg: “A petition on Change.org asking Robinhood to list Shiba Inu—a Dogecoin-inspired meme cryptocurrency—now has more than 326,000 signatures. On the company’s earnings call Tuesday, Robinhood chief executive officer Vlad Tenev said it’s ‘carefully’ considering adding new coins to its offerings. ‘We feel very, very good about the coins that we’re currently listing on our platform, and any new coins that we add we want to feel equally, if not more, good,’ Tenev said. Coinbase Global Inc. added the token last month.”

Can you use Shibu Inu for anything?

Fortune’s McGregor reported that one experiment underway is “ShibaSwap, a decentralized cryptocurrency exchange made by Shiba Inu developers. On Oct. 6, ShibaSwap’s traders exchanged more than $435 million worth of tokens in a single day. Du Jun, cofounder of crypto exchange Huobi, recently told CoinDesk that the ShibaSwap demonstrates Shiba Inu’s growth from a meme coin into a ‘sophisticated’ crypto project. [A project leader for Shiba Inu coin, who goes by Shytoshi] Kusama argues that Shiba Inu’s most important project is Shibarium, a new blockchain that may be able to lower transaction fees for exchanges, games, or other products built on the software.”

Is Shibu Inu a joke?

Sort of, but in the current trading environment, it’s not being treated as one.

As Fortune wrote as early as last May: “For now, SHIB may be a ‘meme coin’ and have little to no underlying value or use cases. But experts say that its popularity should not be ignored since it reflects the behaviors of a new, growing class of cryptocurrency traders. ‘Rather than simply dismissing the hype outright, it’s important to realize that what we’re seeing is the mass movement of traders new to crypto moving into the space,’ says Ben Caselin, head of research and strategy at cryptocurrency exchange AAX.”

Is there an actual Shiba Inu dog?

There certainly is. And the investing fad has even inspired a boom in Shiba Inu dogs, as Fortune’s Danielle Abril reported. “The recent rise of Dogecoin and its buzzy crypto cousin, Shiba Inu coin, which also uses its namesake breed as a mascot, have made Shiba Inu dogs a hot commodity. Fans of digital currencies, along with people with a nose for trends, are snapping up Shiba Inu puppies, creating a boom for the teddy bear-ish dogs that parallels the soaring cryptocurrency market,” she wrote.

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