In the ever-evolving landscape of cryptocurrencies, a duo of meme coins, Dogecoin and Shiba Inu, have managed to secure their spots in the coveted top 10 positions in market capitalization. As someone who has experienced both of these cryptocurrencies during previous bull runs, I can attest to the intriguing results they have delivered. With the next halving event looming, I find it imperative to conduct a thorough assessment to determine which of these meme coins may warrant inclusion in my investment portfolio. Today, we embark on a journey to meticulously compare Dogecoin and Shiba Inu, examining their respective strengths and weaknesses.
Dogecoin: A Decade of Playful Evolution
Dogecoin, which began as a playful Bitcoin parody in 2013, employs the same proof-of-work algorithm for coin generation. Remarkably, Dogecoin has navigated through three crypto cycles and continues to gain traction with each one. Its longevity in the crypto sphere is a testament to its resilience and popularity.
Shiba Inu: A Recent Contender with Burn Mechanism
In contrast, Shiba Inu made its debut in 2020 as an ERC-20 token with a pre-mined supply. Notably, half of its supply was famously sent to Ethereum's Vitalik Buterin, resulting in a significant burn. At present, Shiba Inu boasts an astronomical total supply of 1 quadrillion, but it's essential to note that nearly half of this supply has already been burned, leaving approximately 589 billion in circulation. Furthermore, Shiba Inu incorporates a burn mechanism designed to continually reduce its token supply as more people engage with it.
Supply Dynamics: Beyond the Numbers
While Shiba Inu's supply may seem overwhelming, it's crucial to consider that the majority of it is already in circulation. The future growth of a cryptocurrency is not solely determined by supply quantity. Dogecoin, despite its smaller supply, faces a moderate 3.5% annual growth rate. To counteract this, Dogecoin must attract more users and increase investments annually.
Exposure and Social Media Presence: A Tale of Two Coins
Dogecoin enjoys a substantial advantage over Shiba Inu in terms of exposure. As one of the pioneers in this space, Dogecoin has been around for a decade and continues to thrive with each crypto cycle. Shiba Inu, in contrast, is a relative newcomer with only three years under its belt, having experienced just a single crypto bull run.
Comparing their follower counts and exposure, both cryptocurrencies boast nearly equivalent numbers on Twitter, with Dogecoin commanding 3.8 million followers and Shiba Inu close behind at 3.7 million. However, the significant difference lies on Reddit, where Dogecoin has a considerably larger following of 2.4 million members, compared to Shiba Inu's combined Reddit membership of 628 thousand across two pages. Additionally, Dogecoin slightly outpaces Shiba Inu in Google web searches over the past 12 months, while Shiba Inu has the upper hand in YouTube searches during the same period.
A Tale of Two Growth Stories
Shiba Inu has achieved an impressive feat by surpassing Dogecoin's growth within a few months, entering the top 10 in market capitalization within a year. When comparing the paths both cryptocurrencies took to reach their top 10 ranks, notable differences emerge. Shiba Inu experienced an astonishing 1,528,581x increase from its all-time low in November 2020 to its peak in October 2021, achieving this feat in less than a year. In contrast, Dogecoin only saw an 8,418x increase from its all-time low in May 2015 to its peak in May 2021, with smaller returns that took six years to materialize.
Can Dogecoin or Shiba Inu Make You a Millionaire?
The burning question on many investors' minds is whether Dogecoin or Shiba Inu can make them millionaires. The short answer is no. Unless a substantial amount is invested in either coin, reaching a million dollars during the next bull run is unlikely. Both cryptocurrencies currently rank in the top 20 by market capitalization, and achieving significant price increases would require a substantial influx of funds.
Conclusion: A Prudent Approach to Meme Coins
Shiba Inu's remarkable growth can be attributed to various factors, including strategic marketing and impeccable timing. However, it's essential to exercise caution when considering investments in meme coins. Even if Dogecoin or Shiba Inu were to return to their all-time high market caps, it would only result in a tenfold increase from their current prices. To reach a million dollars, an investment of at least $50,000 would be necessary. Meme coins are known for their unpredictability, making them riskier compared to other options like Layer 1 cryptocurrencies or Bitcoin.
In my own portfolio, while I hold both Dogecoin and Shiba Inu, I am inclined to add more Shiba Inu. It won't match the size of my top three holdings—Bitcoin, Ethereum, and XRP—but with a well-thought-out strategy, it has the potential to outperform them. It remains in my speculative stash, a segment of my portfolio that I monitor closely as developments unfold.
Lastly, I'd like to share a personal experience. I held onto Dogecoin in the hopes that Elon Musk's SNL appearance would boost its price, but it took a nosedive, erasing all my gains. In contrast, my experience with Shiba Inu was different. I entered Shiba Inu early in its rally and made calculated profit-taking moves along the way, resulting in significant gains. This experience underscores the importance of having a well-defined strategy for securing profits rather than succumbing to hype and greed.