Investors in meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) delivered huge returns at the peak of the crypto bull market in 2021. But for now, the good times are over. Rising interest rates have dampened investors’ appetite for riskier assets like crypto. These two cryptocurrencies lost most of these gains. So, is an increase expected for SHIB and DOGE in the upcoming period? Analysts from consulting giant The Motley Fool pointed to another altcoin instead of SHIB or DOGE. Here are the details…
Biggest hurdle for SHIB and DOGE: Lack of adoption
In 2023, there is hope for a market recovery. But according to The Motley Fool, you don’t have to rush to pile on meme coins. The first thing analysts note is the use of cryptocurrencies as currency. Functioning as a cryptocurrency is the primary purpose of many tokens. According to analysts, a coin should be functional; otherwise, why would anyone desire it? It’s like taking your paycheck and not being able to spend it. Fiat currency has value because it is accepted almost everywhere, even in most foreign countries.
According to The Motley Fool, lack of adoption is the biggest hurdle for Dogecoin and Shiba Inu. Some traders accept Dogecoin and Shiba Inu, but in general you cannot take both to the market to pay for the market. You cannot hire a large number of people who will accept Dogecoin as payment. At this point, both coins contain more innovation than anything else.
According to analysts, the increase these coins saw in 2021 was due to the impact of demand and excitement as they were very popular for a short time. But that’s over. Investors who couldn’t buy near the top and sell fast enough lost most of their earnings. Unless the market becomes wildly speculative again, adoption may be needed to drive real demand for these coins. They don’t have much use in the real world right now.
Math against both coins
The second factor that analysts note is supply. Supply is the other factor that affects currency value. Inflation soared as the total supply of US dollars increased during the pandemic. The increase in the number of US dollars reduced their purchasing power. The same concept applies to cryptocurrencies: one of the attractive aspects of Bitcoin is that it will only have a maximum of 21 million coins. Increasing demand only strengthens their value. However, Dogecoin has an unlimited supply, with 10,000 DOGE circulating every minute.
The Shiba Inu entered the market with a maximum supply of 1 quadrillion, more than 47 times the total US money supply. There are roughly 589 trillion tokens in circulation today. According to the analyst, this makes it highly unlikely that the Shiba Inu will hold a meaningful price per token. Sparse adoption and too much supply weaken both Dogecoin and Shiba Inu.
Analyst: Check out this top altcoin
However, the analyst points to an altcoin worth buying in the bear market. “This bear market can be a buying opportunity; Think Ethereum instead of Dogecoin or Shiba Inu,” he says. Ethereum, as we reported on cryptokoin.com, has the largest market capitalization among altcoins and is the most widely used Blockchain, home to around 3,000 decentralized applications. The coin is down 75 percent from its high. But the thousands of applications running on the Ethereum Blockchain are giving chances for more widespread adoption as the crypto industry grows and matures.
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