Experts say retail investors should stay away from the ‘war of meme coins’

The growth seen over a few sessions has put these Shina Inu-based cryptocurrencies among the top 10 digital assets with a combined market capitalization of close to $80 billion.

Dogecoin, which broke above the psychological level of $0.30 today, has registered gains of around 11,000% on a one year basis and 50% on a one month basis. Shiba Inu, on the other hand, has gained 8,50,00,00% in the last one year and 1,000% in the last 30 days alone.

Experts are of the opinion that rather than fundamentals, the community that believes in these meme tokens is fueling the rally.

“There are no fundamentals driving the price, as these are just community tokens. These are pump and dump coins, which are of no use. Unfortunately, the Shina Inu is also affecting the volume of the entire crypto market,” said Siddhartha. Sogni, Founder and CEO, Crabaco Global, a research, ratings and intelligence company focused on blockchain and cryptocurrencies, said.

According to industry estimates, the Shina Inu’s trading volume on some exchanges was three times that of bitcoin.

Earlier in the year, GameStop’s shares also saw a massive rally due to the equal attention paid to social media and chat rooms, including Reddit.

Similarly, in February Dogecoin was up by over 800% within 24 hours after a lot of users on the Reddit message board took note of the cryptocurrency. However, despite the recent rally, the Mem coin is still 60% off its all-time high of $0.73 which was hit in May 2021.

Another factor that experts think could be driving the rally in Mem tokens is their low price.

“Volumes are almost exclusively trading volume, as there is no delivery-based trading. Also, I think since these two tokens have the lowest price among the top 10 coins, some retail investors go for them thinking that Maybe these are better bargains. However, this is wrong thinking,” said Ajit Khurana, founder of Genjis Network, a think tank for crypto startup investments.

Another factor that could drive the price of these meme tokens is the fear of missing out on retail investors, according to Hitesh Malviya, founder of its blockchain and cryptocurrency publication, Blockchain.com.

“There is a large community behind the rally and especially in the case of the Shiba Inu, they believe that the price will reach $1. But investors should understand that this is not possible due to the Shiba’s circulating supply “

There is also a rumor that US-based trading platform Robinhood is going to list Shiba Inu.

However, experts warn that despite the breakneck rally, it is better for investors to buy fundamentally stronger coins such as bitcoin or ether.

Malviya said, “Investors should be very careful at these levels as the correction can be long.”

According to the expert, the Shiba Inu has already reached the top and started correcting since morning. “Mem coin found resistance at the level of $0.008 on Thursday morning and has since corrected 20-25%,” Malviya said.

Echoing similar views, Sogni said that retail investors should not get these tokens, as they are highly volatile and completely speculative. “Don’t get into the rat race and stick to radically sound projects. Rally sounds tempting, but jumping into it is like playing with fire.”

While both meme coins have been performing well over the past few days, it is notable that they have been at odds with each other, and the communities supporting their respective coins are fueling the rally.

“While both memes are coins, we have to see them in person. Dogecoin can survive, as it has some technical use cases such as where we can store records and create immutable ledgers. Shiba Inu, on the other hand, is just a token and serves no purpose. So, because I believe that rationality ultimately prevails, I don’t see the Shiba Inu rally sustaining,” Khurana said.

“However, I cannot recommend these coins to anyone regardless of levels, especially the Shiba Inu. Only market technology is working in these coins.”