Why is Shiba Inu Underperforming Dogecoin?
Shiba Inu and Dogecoin, the two meme tokens have had an impressive growth in 2021 but 2022 has not been their year as both the meme coins have lost a major share of their market cap. However, of the two meme coins, Shiba is a soar loser. Shiba has lost over 60% of its value since January 2022 making it one of the worst-performing cryptocurrencies this year.
Doge on the other is also trading lower but in comparison to Shiba, it has had a better performance this year. Doge has lost around 50% of its value this year.
Despite Shiba expanding its ecosystem, it has been underperforming Doge. The reasons why is Shiba Inu Underperforming Doge are:
- One of the main reasons for Shiba underperforming Doge is the acceptance and Doge being backed by popular personalities. Shiba has a better ecosystem than Doge on paper. Most of the projects announced for Shiba are yet to see the light of the sun. Doge despite having a limited ecosystem has been promoted by the well-known faces. One is Tesla and SpaceX CEO Elon Musk. Elon has been the face of Doge and he has been the face of trust for Doge.
- Shiba’s supply has been one of the major concerns. There are over 500 T Shib tokens and even if 1 billion Shib is burned daily, it will have the least impact on the price of Shib. Doge, on the other hand, has a supply of over 132 billion and due to this reason, the price change is higher in the case of Doge.
- The other reason for Shiba underperforming Doge is the lack of competitive advantage of Shiba Inu. Like ETH, Shiba uses the same proof-of-work protocol as Ethereum. Being an ETC-20 token, the transaction speed of Shib is slower and slightly costlier than the Doge. Doge uses the Proof of Work consensus protocol to that of Litecoin which makes it faster and cost-efficient than Shiba Inu.
- In the last 6 months, Doge has lost around 50% while SHIB is down over 60% and this year SHIB has lost nearly 70% of its value. SHIB continues to trail Doge despite expanding its eco-system.