A Bloomberg report says Shiba Inu is a fad and predicts an uncertain future for cryptocurrency

The November edition of the report Outlook crypto by Bloomberg, released late last week, contains dire predictions for the future of Shiba Inu (SHIB), although the cryptocurrency was one of the most prominent in October.

Signed by Mike Mcglone, Senior Commodity Strategist at Bloomberg Intelligence, The study claims that due to a well-structured marketing campaign, an unjustified correlation with Ethereum (ETH) and its low nominal price, SHIB achieved a staggering 830% rating last month, which would have led “stakers” to risk small amounts of cryptocurrency.

The report says a parallel to the US $ 100 purchasing power of SHIB and Bitcoin (BTC). On October 29th, that small investment would buy 1.4 million SHIB, but only 0.0016 BTC, and this could have attracted beginners and less experienced investors to the cryptocurrency.

A Bloomberg report says Shiba Inu is a fad and predicts an uncertain future for cryptocurrency
A Bloomberg report says Shiba Inu is a fad and predicts an uncertain future for cryptocurrency

A graph points to the correlation in the price development of Shiba Inu and Ethereum in 2021 to argue that SHIB would have been pulled down by the rise in ETH. In fact, from late March to May, the rise in ether was accompanied by a similar move by the SHIB, and the same thing happened in the month of October.

Correlation between ETH and SHIB. Source: Bloomberg.

According to the message, The fact that SHIB is an ERC-20 token based on the Ethereum blockchain has meant that the fate of the cryptocurrency is always linked to that of Ethereum in a not exactly orthodox way.

The anonymous creator of Shiba Inu transferred half of the entire SHIB supply (approx. 410 billion SHIB) to the Ethereum founder Vitalik Buterin in May. Buterin burned 90% (which was about $ 6 billion at the time) and said he didn’t want to keep that power over the fate of the coin and donated the rest to charity. The movement of the creator of Ethereum could have contributed to the increase in the value of SHIB as a large number of tokens were withdrawn from circulation.

McGlone characterized SHIB as “a unique combination of economic use of supply and demand, well-structured marketing, ESG and unparalleled 24/7 global gambling”. Ultimately, the Bloomberg analyst warns that looking back at its rapid growth is likely to be similar to what happened in Dogecoin (DOGE) in May.

Following a spike sponsored by Elon Musk’s tweets, Dogecoin rose between Jan.

The report states that Sooner or later, market sentiment becomes risk averse, which removes the speculative frenzy. Bitcoin is thus consolidating its position as the most important store of value, which ether will soon follow due to its properties and stablecoins due to their stability and parity with the US dollar.

FOMO

Information from a newsletter published on Sunday by Into the Block, a data analytics firm for the chain market, warns of numbers that suggest it the SHIB token is experiencing a wave of speculation. The number of addresses that bought the cryptocurrency at values ​​within 20% of its historical maximum has multiplied by six, reaching a record 116,560 in the eight days leading up to November 2nd. These addresses now make up 12% of the total number of Shiba Inu addresses.

This high tracked by IntoTheBlock indicates a frenzy of buying the cryptocurrency near the all-time high, the typical move promoted by the FOMO (fear of getting lost, in literal translation). This phase, marked by the FOMO, is often observed in the final bullish moments of the market.

“The last time this pattern appeared in Shiba Inu in May, SHIB fell 90%,” says the IntoTheBlock newsletter.

As Cointelegraph reported, SHIB investors were gripped by fear after one of the asset’s largest holders moved some of its coins in a case that suggests he may liquidate at least part of his positions, causing a 15% decline over the past seven days.

At the time of writing, according to data from CoinMarketCap, SHIB is trading at $ 0.0005551 and is experiencing an intraday rally of 2.46%.

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