Shiba Inu coin — a new cryptocurrency that is a slight knockoff to Dogecoin — had a massive drop on Tuesday, falling nearly 60% by Wednesday morning.
SHIB coin drops with Bitcoin, Dogecoin
SHIB coin’s drop came as other cryptocurrencies fell in value and price, too. Major players like Ethereum, Bitcoin and Dogecoin all had massive falls Wednesday following a new ban from China about cryptocurrencies.
- Per Reuters, a finance watchdog group in China said institutions and payment companies should try not to offer services related to cryptocurrencies. The Chinese finance advisers said cryptocurrencies rely on a speculative market, which makes them difficult to invest in.
What does this mean for SHIB coin?
The recent drop for Bitcoin, Ethereum and Dogecoin will impact SHIB coin, too, which is already going through its own market fluctuation recently. Cryptocurrency Ethereum co-founder Vitalik Buterin, who was gifted a huge amount of SHIB coins, decided to burn his coins because he didn’t want the power of controlling the market, according to Yahoo! Finance.
Burning coins “refers to the act of sending a token to an unusable account and removing it from circulation, which diminishes supply and increases its scarcity,” according to Benzinga.
Because SHIB coins became rarer, the prices went up. However, it’s not surprising that the prices changed so much in 24 hours because of the China cryptocurrency news since SHIB coin relies on speculation, as I explained for the Deseret News.
- “However, considering that meme-based coins are based almost exclusively on speculation, a particular action does not always mean that its value will skyrocket,” according to FX Street.