Current crash hits Dogecoin and Shiba Inu harder than other cryptos
It comes as no surprise to crypto investors that the overall digital asset market is in decline, but it has been particularly challenging for two previous high achievers – respectively. Last Tuesday, cryptocurrency analytics firm – Arcane Research – released its latest report on the state of the industry , confirming these facts.
This chart from Arcane Research shows that crypto stars – (BTC) and (ETH) – are down -52% and -54%, respectively, from their all-time highs; while meme coins Shiba Inu (SHIB) and Dogecoin (DOGE) are down even further from their highs. SHIB is down -77% while DOGE is down -82%.
Earlier this month Mike McGlone, Chief Commodity Strategist at Bloomberg, predicted this decline for both of these meme projects in his latest research report, titled Crypto Outlook: Don’t Fight the Fed, which examined the potential impact of upcoming government rate hikes cryptocurrencies. While McGlone’s prospects are not good for thousands of no-name crypto projects out there, he foresaw that DOGE and SHIB would be hit particularly hard.
“Crypto is outperforming speculative excesses and could be an early indicator that the overall market tide is about to recede. Peaks in memecoins Dogecoin and Shiba Inu have coincided with similar market tops, emphasizing crypto’s leading signs,” McGlone said in his report. “SHIB in the second half of 2021 and DOGE in the first half of 2021 are examples of coins that are speculative hype and fun for gamers on an unprecedented 24/7 global scale.” What he meant by those published comments, was what shoots up quickly tends to fall just as far and fast as what happened with Dogecoin and Shiba Inu — well before an actual Federal Reserve rate hike this year. The thesis of his report was that rate hikes tend to propel investors away from risky assets as they seek higher returns in safer investment options. McGlone expects Bitcoin and Ethereum to eventually return to all-time highs, but expressed concern that investors have already begun the exodus from dog-themed meme assets.
Since their highs, both DOGE and SHIB have fallen out of the top 10 coins by market cap, and McGlone suggests these speculative assets need to fall further as interest rates rise.
“The never-ending battle for the top cryptocurrencies, often fueled by hype and speculation, makes us realize that most things that add up quickly are scary,” McGlone said.
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