The Shiba Inu is going through a tumultuous period, far from the past euphoria of the same places. While its price struggles to escape a narrow range, the activity of Shibarium, its layer 2 network, is dangerously withering away. The crypto sector is, by nature, dynamic and volatile, but this slump is directly affecting Shiba Inu, as investors turn to new, better performing coins. What is really happening in this constantly moving universe?
The effect of new coin memes
The price of the Shiba Inu, once at the heart of the meme token craze, now seems frozen. Consolidating around $0.00001718 on October 9, it shows a 21% decline from its monthly peak.
This stagnation is particularly striking in a context where new meme coins, like Popcat, Neiro, and SPX6900, are taking off. SPX6900, for example, surged more than 300% in a week, attracting capital and drawing investors' attention away from Shiba Inu.
This craze for new meme coins reflects a marked trend: crypto investors are constantly looking for the next get-rich-quick opportunity.
Shiba Inu, despite its popularity, faces fierce competition which highlights its own limitations. As the performance of new coins explodes, Shiba Inu no longer appears to be able to offer the same short-term return potential.
The reasons for this loss of appeal are multiple. First, the market for meme coins is saturated and experiences rapid turnover. Next, Shiba Inu must face the challenges of its own crypto ecosystem. This is where the Shibarium comes in, a network meant to enhance the Shiba Inu's usefulness. However, far from the expected effect, the latter seems on the contrary to contribute to the current lethargy of the token.
The Shibarium is running out of steam, and Shiba Inu with it
The Shibarium, Shiba Inu's layer 2 network, was initially expected to bring renewed vitality by improving the speed and scalability of transactions.
However, the latest data from ShibariumScan show a worrying drop in its activity. The number of active accounts has fallen below 500, and the new accounts created on October 8 are only 33.
This drop in activity reflects a growing lack of interest, even though the Shibarium was intended to be a driving force for the Shiba Inu ecosystem.
Transaction fees, once at 0.062 BONE, have fallen to 0.005 BONE on average, a drop of 91%. In general, such lower fees could be seen as good news for users.
However, here, they mainly reflect a collapse in the number of transactions on the network. As a result, Shibarium generates less SHIB to burn, a process that is crucial to reducing circulating supply and supporting the value of the token.
Furthermore, the Shiba Inu futures market is not doing much better. Open positions decreased from $70 million to $44 million.
This drop in interest on futures contracts indicates an anticipation of a weak upward movement, or even a distrust of the short-term future of Shiba Inu.
This simultaneous decline of the Shiba Inu and the Shibarium could well mark a turning point for the community of the same corners.
If Shiba Inu fails to revive its utility via its layer 2 network or attract new investors, it risks losing further ground to more dynamic competitors tailored to the expectations of speculators looking for quick wins.
Ultimately, the fate of Shiba Inu and the Shibarium will depend on their ability to reinvent themselves and convince the crypto community once again. Otherwise, history could well relegate them to a simple fashion phenomenon, overtaken by new, more flamboyant stars from the world of meme corners.
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