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Remember dogecoin? A rival ‘meme token’ just hit a record high and is close to overtaking it

CNBC logo CNBC 10/27/2021 Ryan Browne
  • Shiba inu has surged 30% in the last 24 hours, according to data from CoinGecko, hitting a record high above $0.00006.
  • With a market capitalization of more than $29 billion, shiba inu is now the 11th-largest cryptocurrency.
  • Shiba inu is a so-called meme token that bills itself as a "dogecoin killer."
A physical dogecoin token is seen with the logo of rival cryptocurrency shiba inu displayed in the background. © Provided by CNBC A physical dogecoin token is seen with the logo of rival cryptocurrency shiba inu displayed in the background.

Shiba inu, a dogecoin spinoff, is close to surpassing Elon Musk's favorite cryptocurrency.

The digital token has surged 30% in the last 24 hours, according to data from CoinGecko, hitting a record high above $0.00006. It has more than doubled in price in the last week.

With a market capitalization of more than $29 billion, shiba inu is now the 11th-largest cryptocurrency. Dogecoin is the 10th biggest, with a market cap of $31 billion.

Dogecoin was down 11% in the last 24 hours, according to CoinGecko data.

What is shiba inu?

Shiba inu is a so-called meme token that bills itself as a "dogecoin killer." It takes its branding from the same internet meme dogecoin is based on, using the image of a Japanese shiba inu dog.

The token was created in August 2020 by an anonymous individual or individuals known as "Ryoshi." The coin's creator describes shiba inu in a white paper — or, in this case, "woofpaper" — as "an experiment in decentralized spontaneous community building."

Shiba inu is based on the Ethereum blockchain, which has become a go-to for numerous new token projects and a fast-growing trend known as "decentralized finance," which aims to replicate traditional financial products like lending and trading.

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The rise of meme coins like dogecoin and shiba inu mimics the GameStop saga that took place earlier this year, when a flood of retail traders inspired by a Reddit forum piled into the video game retailer's stock, leading to wild swings in the price. In a similar vein, amateur traders have looked to little-known cryptocurrencies in the hope of achieving outsized gains.

Shiba inu's creator claims not to hold any tokens. The cryptocurrency has a total supply of 1 quadrillion, according to data from CoinGecko. In May, Ryoshi sent half of the coin's supply to Ethereum creator Vitalik Buterin, who sent 50 trillion of the tokens to an Indian Covid relief fund. Buterin then destroyed most of his holdings and donated the rest to charity.

Why is it rallying?

Crypto traders have been speculating about whether online trading firm Robinhood could add shiba inu to its platform.

Believers in shiba inu are pushing hard for Robinhood to list the token. They have started a petition on Change.org, which has now reached more than 300,000 signatures. So far, Robinhood hasn't actually said publicly whether it will support shiba inu.

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Robinhood on Tuesday missed revenue expectations for the third quarter after a big drop in crypto trading volume. Shares of Robinhood were down more than 10% in early Wednesday trading.

The online brokerage got a big boost from digital currency trading in the second quarter, with dogecoin accounting for 62% of its crypto revenue during the period.

The shiba inu community has also dropped a number of NFTs, or nonfungible tokens, known as "shiboshis." NFTs are a type of digital asset that tracks ownership of virtual collectible items like art or sports memorabilia.

Cryptocurrencies have been known to undergo wild bouts of volatility. Bitcoin, which recently hit a record high above $66,000, halved in price earlier this year after Chinese regulators clamped down on the country's crypto industry.

Meanwhile, dogecoin, which had a huge rally earlier this year, is currently down 68% from its record high set in early May.

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