Crypto traders are cautioning that the recent surge in tokens based on the Shiba Inu dog breed may not be sustainable, following days of increased activity in the sector.
On Monday, Twitter, the social-media platform owned by Elon Musk, replaced its blue bird logo with that of Dogecoin’s Shiba Inu mascot, causing the crypto to jump in value. Futures markets for Dogecoin (DOGE) set a record as some speculated on the increased use of dogecoin on the platform.
The rise caused several other Shiba Inu-themed meme coins to jump by double-digit percentages, including shiba inu (SHIB), floki (FLOKI), kishu inu (KISHU) and baby dogecoin (BABYDOGE). Some of the more newly created tokens, such as zkDoge and zkShib on the zkSync blockchain, experienced gains of up to 100%.
However, analysts have warned against putting too much stock in these short-term price movements. “We do not believe that it is indicative of a long-term bull run,” said Guilhem Chaumont, CEO of crypto trading firm Flowdesk. “There is a regular pattern of crypto market uptrends with first, bitcoin going through a bull run, then major altcoins pumping, and finally, tokens with small market caps.”
Bonnie Cheung, head of strategy at crypto developer Sending Labs, echoed this sentiment. “The sentiment for meme coins is not a new one, and this means there is a high potential that the growth will fade off as usual in a few days,” Cheung said.
However, she added that the sector may still experience long-term growth if fundamental features strengthen in the coming months. “Shiba Inu, for instance, is gaining additional traction through the launch of Shibarium, its layer-2 protocol built on the Ethereum blockchain. Dogecoin’s recognition by Twitter and the payment world is also growing, and these trends can help record more sustained growth over the long term,” Cheung noted.
Kadan Stadelmann, the chief technology officer of blockchain network Komodo, said that Musk’s support could help bring more awareness and adoption to crypto. “Regardless of whether or not one supports meme coins, it’s impossible to deny that Musk is driving mainstream adoption of crypto and creating media attention that wouldn’t otherwise exist. This is certainly a net positive for the crypto space as a whole,” he said.
