How a risky bet on the Shiba Inu coin made this warehouse manager a millionaire

A “woofpaper” changed Rob’s life.

Early this year, Rob, a 35-year-old former supermarket warehouse manager, began researching cryptocurrencies at his home in northern England. His aim was to modestly grow the tens of thousands of dollars in savings he had built with his partner to create a better future for their young son.

While researching, Rob, came across Shiba Inu coin, a cryptocurrency “meme” coin that was launched in August 2020 by someone who calls themself Ryoshi. Then Rob read Ryoshi’s woofpaper, a play on the term white paper, which explained the philosophy behind the Shiba Inu coin. The woofpaper claimed that Shiba Inu coin was an “experiment in decentralized spontaneous community building.” The paper also said “Shiba Inus are incredible dogs.”

“After reading that, I was hooked,” says Rob, who declined to share his last name. “I just believed the words.”

Rob was inspired to put $8,000, in stages, into Shiba Inu coin. He had only recently become interested in trading cryptocurrencies, and he transferred the majority of his other crypto holdings into Shiba Inu via a crypto exchange. By May, Shiba Inu’s price was worth 1,200 times what it was worth in February when Rob started investing in the coin. At that point, Rob partially exited his position, withdrawing $500,000 worth of Shiba Inu coin—which trades on crypto exchanges as SHIB—and depositing it into his bank account.

“I come from quite a poor background. I could never have even fantasized about having this much money,” Rob said. Rob “cried a lot” after he took out the money, and he checked his bank account every hour on the first day to make sure that it hadn’t disappeared. “But it wasn’t gone. It wasn’t a dream,” he said.

Rob said he had worked hard to climb the ranks of the supermarket chain where he worked to earn roughly $68,000 a year as a manager. But the sudden influx of money pushed him to quit his job just weeks later.

“It was a highly stressed job with a lot of responsibility, but it just never felt like I belonged,” Rob said, explaining that he “couldn’t be happier” now that his main job is being a stay-at-home father. Rob says he’s been wary to spend the money, but he wants to send his young son to private school and maybe even buy a new house for his family—things that he wasn’t considering before the Shiba Inu windfall.

The remainder of Rob’s investments is now split between SHIB and other coins in the Shiba Inu ecosystem, such as LEASH, which Shiba Inu followers consider to be a store of value coin, one that will supposedly increase in value over time due to its limited supply, similar to Bitcoin. A recent surge in SHIB’s price has now propelled Rob’s holdings to be worth over $1 million, according to records reviewed by Fortune.

The dog-coin frenzy of 2021 has now created two bona fide giants in Dogecoin, worth an estimated $35 billion, and Shiba Inu coin, worth an estimated $29 billion, and Rob is not the only one to benefit. At least one SHIB holder managed to turn an $8,000 investment in Shiba Inu coin last August into over $5 billion, according the trader’s wallet, which can be viewed on a public ledger.

Experiences like Rob’s and the anonymous investor’s may be exceedingly rare, and meme coin buyers remain incredibly vulnerable to swings in the market. An investor who bought $100 worth of SHIB on May 10 would have had $25 dollars on May 20 and $200 today. In the past 24 hours, the price of Shiba Inu coin plummeted 18%, and it is trading 36% lower than the coin’s all-time high one week ago.

Still, Shiba Inu’s bull run has minted a new class of millionaire and billionaire investors, since the coin is trading 83,000,000% higher than one year ago. Its rise has shocked the financial world, which is now reckoning with a class of crypto traders who seem to prefer woofpapers to an IPO prospectus.

A social rise

In lieu of groundbreaking new technology, the Shiba Inu coin draws its massive valuation—on par with the likes of carmaker Hyundai—from the nearly religious zeal for the coin among some of its followers.  

Shiba Inu fan accounts boast millions of social media followers on platforms like Twitter. Commenters post thousands of messages and memes a day in forums on Reddit and Telegram.

Shiba Inu’s “otherworldly” rise is based “entirely on cute dog memes shared on Reddit and Twitter,” says Eric Berman, senior editor of U.S. finance at Thomson Reuters Practical Law.

Rob says that joining the Shiba Inu community gave him a sense of belonging.

When he first became interested in Shiba Inu, Rob reached out to Shytoshi Kusama, a project lead and Shiba Inu influencer who goes by a pseudonym, and Kusama immediately responded to him. That was not something that happened with other coins, he said. Rob says he almost pulled his entire savings several times during dips in the market, but members of the community persuaded him not to sell.  

“I made three very close friends [through Shiba], and we formed a little group,” says Rob. “Every now and again, when I was filled with doubt, those friends were there to get my head straight and say, we can do this. Let’s start telling people about Shiba.”

HODL mentality

Rob is now one of hundreds, if not thousands, of people to make a small fortune on an idea that would have been unimaginable in pre-crypto economies: enormous wealth that exists because enough people collectively think dogs are funny.

“We all love dogs and we all love to participate in memes,” says Kosala Hemachandra, CEO of MyEtherWallet, a firm that develops tools on the Ethereum blockchain. “I believe that’s why it gained popularity.” 

Rob defends the coin’s value by pointing to new projects made by Shiba Inu developers—such as a new Shibarium blockchain, a decentralized exchange called ShibaSwap, and NFT artwork.

Some experts agree that new Shiba Inu projects have elevated the coin beyond meme status.

Through ShibaSwap, an internal exchange where users trade tokens in the Shiba Inu ecosystem, the Shiba Inu coin “has transformed to a [decentralized finance] project instead of a pure meme coin,” Vincent Lau, managing director of international operations at crypto exchange Huobi Global, recently told Fortune.

But others say technology does not underpin the coin’s rise.

Berman says that Shiba Inu projects have “little to no actual utility outside the Shibaverse.” But he believes that Shiba Inu has some staying power because of the power of its community.

“I don’t think there is a big risk that the bottom falls out of this market in the intermediate term,” he said. “Shiba clearly has a strong marketing machine, and there are passionate Sheebs out there.”

Others believe that there is a real risk that the market will crash.

“There are no guarantees on the actual value of the tokens in the next five to 10 years,” says Hemachandra. “Ultimately, it comes down to utility. How many users are using it? How is it useful? What does it add to society?”

For Rob, Shiba Inu has become far more important than a meme coin. He says that in addition to changing diapers and feeding his young son, he now spends his days immersed in the Shiba Inu community, participating in online discussions about Shiba projects and answering questions for new traders.

He say he has no plans to cash out on the $1 million he still has wrapped up in Shiba, and he’s comfortable with his family’s financial future depending, in part, on the continued popularity of a volatile dog-themed meme coin.

“I will never take out our entire portfolio,” he says. “I am emotionally attached [to SHIB and LEASH], which can be quite dangerous in crypto environments. But we believe so strongly that there is more to achieve with Shiba.”

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