Shiba Inu (SHIB-USD) is one of the strangest cryptocurrencies on Earth. The Ethereum (ETH-USD)-based token started as a parody of another joke coin, Dogecoin (DOGE-USD). Where Dogecoin had roughly 100 billion coins outstanding… Shiba Inu put out 1 quadrillion. Dogecoin had a secure validation method; Shiba Inu’s founders went out of their way to make it laughably insecure by gifting majority voting power to a single person, Ethereum founder Vitalik Buterin. (Buterin later rescinded that ability.)
But the oddest thing is that Shiba Inu would eventually overtake Dogecoin in market value. In October 2021, the upstart token peaked at a $52 billion valuation, almost doubling Dogecoin’s $29 billion figure. For a brief moment, this new Beanie Babies-like craze was worth 10 times more than the entire value of companies like U.S. Steel (NYSE:X) or Cushman & Wakefield (NYSE:CWK).
The end of the 2021 meme coin bubble came just as quickly. By 2022, $10,000 invested in SHIB would have been worth just $1,200. Billions of dollars in value would simply vanish… transferred from the pockets of one speculator to another.
The Tail Wagging the Doge
Nevertheless, these joke coins have created windfalls for the native cryptocurrencies that run them. These “parent” cryptos care little whether Shiba Inu is the next big thing… or if it’s Sandbox (SAND-USD)… Worldcoin (WLD-USD)… or JasmyCoin (JASMY-USD). As long as the meme coin is on their system, then all the transaction revenues (gas fees) and reserve currency transactions are pointed their way.
As InvestorPlace crypto expert Charlie Shrem points out in his latest presentation, it’s these underlying cryptocurrencies that do even better than Bitcoin. One of these spiked as much as 5,466% during the last Bitcoin-driven crypto boom.
And that brings us to today, where a new resurgence is now taking place in meme coins. Since late February, prices of Shiba Inu have risen as much as 400% on renewed speculative interest. On Monday, InvestorPlace.com’s summary of Shiba Inu’s rise briefly became the most-read piece on our entire website. It’s a level of mania we haven’t seen since the heady days of 2021.
That’s creating new potential for the most risk-seeking investors. As Charlie says during his latest presentation, this new crypto bull market could soon turn into a mania. And if history repeats itself, our InvestorPlace.com writers believe these underlying cryptocurrencies will be the ones to benefit…
Ethereum (ETH-USD)
Prices of Ethereum have already risen 12% since I wrote about it here last week. The 10-year-old cryptocurrency is the world’s second-most-valuable cryptocurrency behind Bitcoin (BTC-USD), and its tokens run everything from Shiba Inu to 80% of traded NFTs.
In other words, every Shiba Inu coin is actually a fungible token on the Ethereum blockchain.
Other Ethereum-based meme tokens have also been rising in popularity. JasmyCoin, another meme coin with plenty of retail interest, has seen its value surge 400% over the past month. Volumes traded have risen from roughly $30 million per day to well over $500 million. Pepe (PEPE-USD) has seen a similar rise.
That’s created a new spike in Ethereum “gas” prices, the cost of transacting any token on the Ethereum blockchain. On March 5, prices peaked as high as $98, up from $17.38 at the start of the year. And given the close relationship between rising gas prices and Ethereum’s underlying price, there’s a good chance that the world’s second-largest crypto will keep going up in the short term.
David Moadel also points out this week at InvestorPlace.com that Bitcoin’s halving event on April 19 could also send Ethereum prices to $5,000 this year.
Previous halving events have accompanied rallies in Bitcoin. Therefore, April could be an epic month for Bitcoin, but don’t overlook Ethereum.
[That’s because] it also makes sense to hold some Ethereum, which is likely to make an even bigger move than Bitcoin. Indeed, it’s entirely possible that ETH-USD will break above $5,000 sometime this year.
Alex Sirois sees even better long-term upside. In a recent InvestorPlace.com article, he writes how Ethereum has 5x upside by 2025, driven by its dominance in the digital world:
For one, Ethereum continues to underpin the entirety of the cryptocurrency space through its dominance in DApps [i.e., decentralized applications] and smart contracts. It is integral to the entire crypto environment. Furthermore, Ethereum will soon be available through spot ETFs a la those that recently were allowed through Bitcoin.
In either case, Ethereum has long been the “safest” cryptocurrency to buy besides Bitcoin. And as meme mania heats up, Ethereum should benefit handsomely.
Solana (SOL-USD)
Prices of Solana (SOL-USD) have done even better since last week’s update. Values are up 18%, and the “fourth generation” crypto has attracted a great deal of new money.
The most notable of these is dogwifhat (WIF-USD), a new pup-themed crypto whose website simply describes itself as “literally just a dog wif a hat.” Over the past two weeks, speculators have pushed its value to $2 billion. Over $1.4 billion traded hands on March 6 alone. William White documents this bizarre coin for InvestorPlace.com in an update this week. Other misspelled meme coins on Solana – like Jeo Boden, Olen Mosk, and Solama – also have risen for no clear reason. They are worth well into the tens of millions of dollars by market capitalization.
Still, the Solana ecosystem is home to more reasonable bets, such as AI-based Render (RNDR-USD) and indexing protocol The Graph (GRT-USD). These better-established tokens generate more consistent on-chain activity, leading InvestorPlace.com writer Chris MacDonald to call Solana an even better bet than Ethereum.
The [Solana] network has become synonymous with the NFT space, given the fact that many transactions are for smaller dollar amounts. Ethereum’s network, which can charge hefty gas fees for its usage, isn’t as well-suited for such purposes. Hence, the real-world utility Solana has been able to generate.
While Ethereum focuses more on gradual upgrades, Solana is known for innovative solutions such as their Saga phone and successful crypto strategies. These high-growth strategies make this token more compelling for those seeking outsized gains, at least during this bull market rally.
For risk-averse investors seeking to profit from the unpredictable surge in memecoins, Solana is another solid wager.
NEAR Protocol (NEAR-USD)
Finally, Faisal Humayun writes this week at InvestorPlace.com that crypto exchanges will do well as trading activity heats up. He picks out Coinbase (NASDAQ:COIN) and Binance (BNB-USD) as two top winners.
Meanwhile, Muslim Farooque finds even more potential in NEAR Protocol (NEAR-USD), an ecosystem that includes names like Chainlink, The Graph, Maker, and Siacoin. The system builds on previous attempts at expanding Layer 1 blockchain networks and has become a dominant player in the space.
NEAR Protocol redefines the digital landscape as a decentralized supercomputer, effectively overcoming typical blockchain challenges with a user-centric design. NEAR’s approach to account aggregation simplifies the blockchain experience by enabling single-account management across multiple networks, streamlining user interactions.
While all three will succeed if crypto prices keep rising, NEAR has the advantage of being decentralized at a time where the U.S. Securities and Exchange Commission (SEC) is cracking down on the centralized type. Coinbase has mutiple lawsuits against it, leading some Wall Street analysts to call the company “uninvestible.” Binance CEO Changpeng “CZ” Zhao is being personally sued by American regulators.
On the other hand, the SEC has only managed to reference NEAR Protocol in lawsuits, and not target the cryptocurrency itself. NEAR acts only as a platform to help developers create crypto-related tools. And given NEAR’s recent price surge, don’t be surprised if speculative interest in the system also continues… at least for now.
The World’s Biggest Casino
I rarely recommend meme coins besides the occasional flutter. The only money flowing into cryptocurrencies must come from other investors, so the overall industry is a negative sum game once you remove the “house cut” that mining firms and exchange owners take. Play the game long enough without a strategy, and you eventually walk away with less than you started.
Of course, some tokens will succeed. There are over 500,000 of these on the Ethereum blockchain alone, and it’s almost certain that some winners will emerge. If you have a system that can detect speculative interest before the crowd jumps in, then you’re almost certain to make money. The meme-coin casino has no mechanism for kicking out card sharps.
Meanwhile, those with longer-term views can often profit from identifying broad trends in investor sentiment. Speculators who bought Bitcoin in 2016 would have seen 2,000% returns within two years. Lucky Shiba Inu speculators saw even greater gains in 2021.
Indeed, crypto pioneer Charlie Shrem says a massive melt-up in crypto has begun… one that, he says, could drive Bitcoin to $1 million. History shows that smaller altcoins could soar as high as 134X, 646X, or more.
On the date of publication, Thomas Yeung held no positions in any stock mentioned in this piece. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
