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Tag: Coin

  • Is the Meme Coin Craze Over?

    Is the Meme Coin Craze Over?

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    The frenzy around meme coins took over the crypto market in 2021. With a monumental rise of more than 10,000%, Dogecoin (DOGE) thrashed every opponent and entered the list of top 10 digital currencies. The story of Shiba Inu (SHIB) was no different. The biggest rival of Dogecoin performed better than its counterpart in 2021. In fact, for a brief period, the market cap of Shiba Inu jumped above the overall value of Dogecoin.

    Both meme coins witnessed strong growth among crypto communities during the last year. However, with a drop of over 60% from their all-time highs, several questions are rising around the future of Shiba Inu and Dogecoin. Even after the massive market correction, DOGE and SHIB have a market cap of $18 billion and $14 billion, respectively. Finance Magnates asked leading crypto voices to share their opinions regarding the future of meme coins.

    “Memecoins like Dogecoin and Shiba Inu may be performing woefully at the moment, but this by no means implies they are fizzling out their relevance. The broader market is underperforming at the moment and by virtue of the nature, meme coins are poised to print a far wider rate of decline based on their volatility,” Sven Wenzel, co-founder of Castello Coin, said.

    Market Conditions

    According to Wenzel, the current market conditions are tough but under the normal market situation, meme coins will skyrocket once again. “When normalcy seems to return to the market, we can expect Dogecoin and Shiba Inu to do what they know how to do best-that is, chart a massive upward growth. With the current market downturn, a number of investors have lost a lot of money, and the first instinct by many risk-takers will be to invest in tweet-sensitive coins that can help boost the prices of Dogecoin and Shiba Inu. Based on this, we are likely to see massive retail cash inflows into these top meme coins in a short while,” Wenzel added.

    Doge and SHIB

    Maria Stankevich, the Chief Business Development Officer at EXMO UK, believes that not all meme coins will disappear, some are here to stay.

    “It is difficult to argue with the statement that along with the formation of the market, we will inevitably observe its natural cleansing from empty projects. But we’re still in the nascent phase, where most players feel pretty free with little to no regulation. For example, we can take the current situation with Elon Musk and McDonald’s. After the publication of McDonald’s, the Grimacecoin token was created on the Binance Smart Chain network, the value of which at the moment increased by more than 200,000%, to $2. It isn’t easy to imagine such a situation in the traditional finance market, so most classic traders look at cryptocurrencies as a sandbox where children play,” she said.

    “However, there is a trend mainly related to the regulation and protection of clients from scams. I would not say that all meme-coins will disappear. Dogecoin is a specific marker of the era of creation and formation of cryptocurrencies. The creators had no plans to launch the coin into space, and I am sure that none of them expected Elon Musk to become their ambassador. I think that shortly the number of dummy projects will decrease. Still, until there is proper regulation, there will always be people who hope for a magical way to earn money without doing anything quickly,” Maria explained.

    Rising Demand

    Johnny McCamely, CEO of CryptoClear, said that the short-term spike in Shiba Inu and Dogecoin is due to a rise in demand from investors. “Recent rallies in coins such as DOGE and SHIB are driven by a surge in demand to get rich quick, bitcoin is back above $40,000 USD and traders and investors are switching back onto Crypto. Many are wanting to make a quick gain via the likes of DOGE and SHIB, many other “meme coins” as they are termed have popped up recently such as Marshall Rogan Inu (MRI). I believe this is a short-term spike due to the investor’s demand to get rich quick,” he said.

    The frenzy around meme coins took over the crypto market in 2021. With a monumental rise of more than 10,000%, Dogecoin (DOGE) thrashed every opponent and entered the list of top 10 digital currencies. The story of Shiba Inu (SHIB) was no different. The biggest rival of Dogecoin performed better than its counterpart in 2021. In fact, for a brief period, the market cap of Shiba Inu jumped above the overall value of Dogecoin.

    Both meme coins witnessed strong growth among crypto communities during the last year. However, with a drop of over 60% from their all-time highs, several questions are rising around the future of Shiba Inu and Dogecoin. Even after the massive market correction, DOGE and SHIB have a market cap of $18 billion and $14 billion, respectively. Finance Magnates asked leading crypto voices to share their opinions regarding the future of meme coins.

    “Memecoins like Dogecoin and Shiba Inu may be performing woefully at the moment, but this by no means implies they are fizzling out their relevance. The broader market is underperforming at the moment and by virtue of the nature, meme coins are poised to print a far wider rate of decline based on their volatility,” Sven Wenzel, co-founder of Castello Coin, said.

    Market Conditions

    According to Wenzel, the current market conditions are tough but under the normal market situation, meme coins will skyrocket once again. “When normalcy seems to return to the market, we can expect Dogecoin and Shiba Inu to do what they know how to do best-that is, chart a massive upward growth. With the current market downturn, a number of investors have lost a lot of money, and the first instinct by many risk-takers will be to invest in tweet-sensitive coins that can help boost the prices of Dogecoin and Shiba Inu. Based on this, we are likely to see massive retail cash inflows into these top meme coins in a short while,” Wenzel added.

    Doge and SHIB

    Maria Stankevich, the Chief Business Development Officer at EXMO UK, believes that not all meme coins will disappear, some are here to stay.

    “It is difficult to argue with the statement that along with the formation of the market, we will inevitably observe its natural cleansing from empty projects. But we’re still in the nascent phase, where most players feel pretty free with little to no regulation. For example, we can take the current situation with Elon Musk and McDonald’s. After the publication of McDonald’s, the Grimacecoin token was created on the Binance Smart Chain network, the value of which at the moment increased by more than 200,000%, to $2. It isn’t easy to imagine such a situation in the traditional finance market, so most classic traders look at cryptocurrencies as a sandbox where children play,” she said.

    “However, there is a trend mainly related to the regulation and protection of clients from scams. I would not say that all meme-coins will disappear. Dogecoin is a specific marker of the era of creation and formation of cryptocurrencies. The creators had no plans to launch the coin into space, and I am sure that none of them expected Elon Musk to become their ambassador. I think that shortly the number of dummy projects will decrease. Still, until there is proper regulation, there will always be people who hope for a magical way to earn money without doing anything quickly,” Maria explained.

    Rising Demand

    Johnny McCamely, CEO of CryptoClear, said that the short-term spike in Shiba Inu and Dogecoin is due to a rise in demand from investors. “Recent rallies in coins such as DOGE and SHIB are driven by a surge in demand to get rich quick, bitcoin is back above $40,000 USD and traders and investors are switching back onto Crypto. Many are wanting to make a quick gain via the likes of DOGE and SHIB, many other “meme coins” as they are termed have popped up recently such as Marshall Rogan Inu (MRI). I believe this is a short-term spike due to the investor’s demand to get rich quick,” he said.

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  • Fact Check: USD Coin is the largest regulated stablecoin in the world

    Fact Check: USD Coin is the largest regulated stablecoin in the world

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    We all need to work together to move crypto adoption forward, and it’s important that we all start with facts. So we have to correct the record after reading the article titled “A Regulated Stablecoin Means Having a Regulator” by Dan Burstein, Chief Compliance Officer of Paxos. In case you missed it, the article was an inaccurate attack on USDC (market cap: $27.5B) which is minted by CENTRE (a consortium of which Coinbase and Circle are members). USDC is one of several alternatives to the stablecoin issued by Paxos (market cap: $900M). Coinbase remains coin agnostic and supports many stablecoins on our platform, including Paxos and USDC. However we felt it important to share this post in our effort to fact check misinformation and mischaracterizations about crypto. Let’s get started.

    “Neither USDC nor Tether is a regulated digital asset, for the simple reason that neither token has a regulator.”

    Fact Check: USDC is indeed regulated. USDC is regulated as a stored value instrument (just like a pre-paid card). Stored value products are regulated under state money transmission laws. As the issuer of USDC, Circle is subject to oversight by 46 state regulators, which conduct frequent exams of Circle’s activities.

    “In fact, neither USDC nor Tether tokens are “stablecoins” in anything other than name. These tokens are backed by illiquid and risky debt obligations — a critical weakness that no prudential regulator would allow to exist as this creates undue risk for their customers.”

    Fact Check: The assets backing USDC are prescribed by the state regulators which provide companies like Circle a list of permissible investments in which the USD backing USDC can be invested. Here is an example from the state of California. These are the same laws that protect the fiat money customers hold at Coinbase or Paypal. These laws are essentially customer protection laws, designed with the clear purpose of ensuring that the stored value is safe. (You can see the make-up of the assets backing USDC here — they all have investment-grade credit ratings.)

    “Proper regulation of financial services firms — which must include comprehensive oversight of the products and services offered by those firms — is the only way to protect clients and customers. What does that mean tangibly? There is direct oversight of client protections, resolution planning if there is a failure, privacy protections, consistent reserving practices plus audits and exams to verify this.

    Fact Check: Regulation is key. Circle, the issuer of USDC is a money services business registered with FinCEN and 46 state regulators. Reserves are reported to the states pursuant to money transmission laws. Circle, and hence the reserve, is audited by Grant Thornton, a leading global accounting firm. You can find Circle’s 2020 audited financial statements here. Further, every month, Grant Thornton attests (i.e., verifies publicly) that the reserve balance equals the USDC in circulation. You can find those attestations here.

    “The issuer can (and often does) use consumer funds to pursue risky high-yield investments for its own financial gain.”

    Fact Check: Nope, not USDC. State Permissible Investment requirements address this risk. The USDC reserve contains no high-yield investments.

    “In the case of USDC, reserves are held on Circle’s balance sheet, implying that Circle views USDC reserves as its own property.”

    Fact Check: Many issuers of stored value instruments report the reserve assets on balance sheet, this is a common and acceptable accounting practice and should not be misunderstood to mean that Circle views USDC reserves as its own corporate property. The key to test this is to verify that an offsetting liability to the asset is also reported. In Circle’s publicly-filed financial statements you can clearly see that the reserve is “segregated for the benefit of USDC holders,” and that there is a corresponding liability of “Deposits from USDC holders,” making clear that the funds belong to the holders of USDC.

    Summary:
    Coinbase encourages its customers and all crypto market participants to research the cryptocurrencies they transact with. Stablecoins have different reserves and customers should pay attention to those reserves. USDC is regulated and has reserves that comply with state licenses and have a proven record of stability.

    Fact Check: USD Coin is the largest regulated stablecoin in the world was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

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  • Elon Musk Leaving Doge Behind For New Dog Coin?

    Elon Musk Leaving Doge Behind For New Dog Coin?

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    Elon Musk has seemingly left behind the Dogecoin for a shiny new dog coin; Shiba Inu. Shiba Inu is a dog breed. More specifically, the dog that is used in the Dogecoin memes is a Shiba Inu. Given the popularity of Dogecoin, the coin seems to have been created to benefit from that popularity.

    The coin is created by someone who is only known by the name Ryoshi. Little else is known about the founder. This is very similar to the case of bitcoin with Satoshi Nakamoto. A moniker that no one has claimed is them to this date.

    Related Reading | Crypto Isn’t Money, Annual Economic Report On Bitcoin

    Musk posted a cryptic tweet on his Twitter earlier today apparently in reference to a dog breed he’s getting. But the message behind the tweet was received loud and clear by the market.

    The tweet simply said, “My Shiba Inu will be named Floki.”

    After the tweet went live, the price of Shiba Inu rose quickly. Rising 23% in a couple of hours.

    More interestingly is the creation of another dog coin named Floki. The coin seems to have been created after Musk tweeted and now the coin is up a whopping 3,000 percent.

    Rise Of The Dog Coins

    The billionaire has always been a die-hard fan of Doge. Always tweeting in support of the coin and the project. He calls it the coin of the future. But it wasn’t until a couple of months ago that the billionaire’s tweets started leading the coin to pumps.

    With the movement of market prices after his tweets, people seem to have started to hang on to the billionaire’s every word. Putting money into a newly made coin just because he mentioned that he was going to name his dog that.

    Shiba Inu price chart from TradingView.com

     

    Shiba Inu price pumps after Elon Musk's tweet | Source: SHIBUSD on TradingView.com

    This is not the first time that Elon Musk has mentioned Shiba Inu. He made reference to the coin earlier in March when he tweeted that he was going to get a new dog. A Shiba Inu breed. The tweet read, “I’m getting a Shiba Inu. #resistanceisfutile.”

    The tweet made no mention of the coin itself. But nonetheless, people took it as such and the coin pumped. SHIB, as the Shiba Inu coin is commonly known, has pretty much followed the pattern of Dogecoin ever since. Rising and falling accordingly whenever Musk tweeted and people bought the coin.

    Doge And Subsequent Dog Coins

    There have been a number of meme coins made as a nod to the Dogecoin. Coins like the DogeFather, Shiba Inu, ShibaPup, and others. Shiba Inu touts itself as the Dogecoin killer.

    These coins have no use cases really. If anything, they are just coins made to pump and dump and make a quick buck from. There is nothing remarkable about the projects themselves.

    But the remarkable thing is how these coins seem to gain market value. Coins with seemingly nothing to offer the market somehow end up with a huge market valuation. Shiba Inu currently has a $7.32 billion market cap.

    Related Reading | Can Elon Musk Go To Prison For Manipulating Prices And Shilling Shitcoins?

    All of these coins have one thing in common; they are all in reference to dogs.

    Dogecoin itself that started all of it was created as a “tongue-in-cheek” joke towards bitcoin and the crypto market. It was not meant to do anything. Even the founders sold off all of their coins early on.

    Musk has been talking about getting a Shiba Inu for months now but has still not gotten one. And people are using his tweets to manipulate the market.

    Whether Musk meant the tweets to promote to coin is not known. But investors certainly think that’s what it’s meant to do.

    Musk has been talking about getting a Shiba Inu for months now but there is none in sight.

    Featured image from Observer, chart from TradingView.com



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