Shiba Inu and Sol ID-work/ Getty Images, Skorzewiak/Shutterstock
Shiba Inu dropped by 40% in the past week, while DeFi token soulana has increased 21%.
Investors are shifting away from memcoins to coins that have real uses.
Investors were this week unnerved by a Squid Game-themed token scam and by shiba Inu whale activity.
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This week Shiba inu's appeal has dropped by up to 40% in the seven days leading up to Friday. Meme tokens have been abandoned by investors in favor of cryptocurrencies that can be used for real-world purposes, such as solana or ether.
Dogecoin-inspired meme coins were down around 5% to $0.00005164 after touching a low of $0.00004130 this week on the Coinbase exchange. This represents a drop of nearly 40% week-on week.
Due to the fact that the majority of shiba Inu is in very few hands, the coin's rapid rise and developments in crypto space have attracted investors to more established tokens, there has been a surge in profit-taking.
There are tons of shib coins to be sold and huge bags for whales to offload. It is possible to drive prices up because only a few whales have a lot of supply, but small-time traders won't know when whales will sell," Ali Beikverdi (CEO and cofounder of bitHolla), an exchange software company, said.
Shiba Inu holders were shocked when the second largest shib address began moving $2.3 billion worth the coin from its wallet earlier this week. According to Coinmarketcap data, that wallet holds 7% of the shiba Inu currently in circulation while the largest one has 41%.
A blistering rally in the "Squid Game", a token that was inspired by the Korean hit series on Netflix, ended in that coin plummeting to 0 in less than 24 hours from $3,000 to close to. This incident rekindled concerns about the possibility of scams in crypto markets.
"Indeed, investors don’t like losing money. "What happened to the Squid Game token caused high levels of discomfort amongst investors," Ryan Wilkinson from Blockasset.co, a NFT marketplace built upon the solana network, said.
Investors have been flocking to coins that have real uses, such as those tied to decentralized finance or non-fungible tokens like ether, solana, and avalanche.
Solana's sol token gained 21% this week, hitting record highs above $250. Similarly, avalanche has seen its avax rise 18% and ether has gained 1.6%.
Wilkinson stated that "Solana" is undoubtedly the most popular blockchain today because of its eco-friendliness and usability.
He stated that the greatest source of increased demand for sol is "the number of Decentralized Finance (DeFi) apps and non-fungible tokens(NFT) floating atop blockchain.
Ether benefited from the CME's announcement of micro futures - the largest derivatives exchange – as well as the increasing momentum around NFTs, the metaverse, and ethereum.
Market watchers are confident that these more speculative coins, despite the scams and scandals that have been linked to meme cryptos and social tokens at times, will continue to exist, despite all of this.
Marcus Sotiriou (sales trader at GlobalBlock), said that meme tokens would play a major role in the cryptocurrency market.
We have evidence from coins such as DOGE and SHIB to support this. These communities are very powerful in a world that is connected via social media. They also take advantage of network effects.
