A cryptocurrency token called Shiba Inu (SHIB) has soared in price—up 120 percent on the day at one point on Tuesday morning—after it was listed on the major cryptocurrency exchange Binance.
Binance announced the SHIB listing on Monday afternoon, stating it is “another meme coin similar to Doge.”
The token is currently worth around $0.00003 after its sharp rise in price today, and the total value of all SHIB in circulation—also known as its market cap—is $12.4 billion. The price and market cap are both likely to fluctuate rapidly.
Adrian Zduńczyk, co-founder of blockchain analysis group YellowBlock and CEO of The Birb Nest crypto educational platform, told Newsweek that the current decentralized finance (DeFi) cryptocurrency market has seen an increase in “over-hyped coins” which could pose a threat to investors if the bubble bursts.
DeFi markets are financial markets in which there is no central authority operating them—unlike real money, where banks and financial institutions can influence the economy.
Zduńczyk said: “The current state of DeFi market as a part of the entire cryptocurrency market reminds me a lot of a large bubble which is being inflated by over-hyped demand and high returns expectations.
“Bonfire or Shiba Inu are also joining on the hype train and, assuming the crypto market does not collapse anytime soon, similar patterns and market bubbles may appear.
“Traders should always be aware that most often, whatever goes up in price extremely fast, it’s not sustainable enough to trade at overbought market conditions for a long period of time.”
Financial experts have previously warned Newsweek about the risks associated with cryptocurrency trading, including volatile prices.
SHIB was launched in August 2020 and its website calls it “an experiment in decentralized spontaneous community building.” The site also depicts SHIB as a direct competitor to Dogecoin—the token initially launched as a joke back in 2013 that has also seen a significant rise in price this year.
SHIB gives itself the “Dogecoin Killer” nickname, and the token’s symbol is a cartoon depiction of a Shiba Inu dog—the same breed associated with Dogecoin.
It should be noted that the identity of SHIB’s founder is not currently listed on the token’s website. A crypto’s founder having an unknown identity is considered a red flag. All that is known is that the founder uses the online identity Ryoshi. In February they claimed in a Medium post that they did not own any SHIB, though this may have changed.
In addition, in a statement regarding its SHIB listing, Binance warned that, as of May 10, one wallet held more than 50 percent of all SHIB tokens in existence.
BSCScan, which tracks cryptocurrency transfers and holders, does not appear to list this particular 50 percent wallet but shows that one wallet does hold 10 percent of all SHIB tokens. These large holders, also known as “whales” in the crypto world, can be concerning because it means a large sell-off is possible.
Newsweek has contacted Ryoshi for comment.