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Meme Coin Frenzy SHIB, Others Fueled By Dogecoin

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Shiba Inu has been the talk of the crypto-verse and mainstream media recently. It is a meme coin themed around the Shibu Inu dog, a Japanese dog breed that Dogecoin (DOGE) is also basing its image on.

According to data from CoinMarketCap, SHIB hit its all-time high of $0.0000388 on May 10 after it surged more than 2,500 percent from trading at $0.00001478 on May 7.

The token has now been listed on most of the major exchanges, such as Binance, Coinbase, FTX, OKEx and even Binance’s Indian counterpart, WazirX. It had also briefly broken into the top 20 cryptocurrencies list by market capitalization. Currently, it has dropped off in the rankings, with a market cap of just over $6 billion. Earlier on May 10, SHIB’s market capitalization hit an all-time high of over $13.5 billion.

SHIB was launched in August 2020, soon after Dogecoin’s hype on TikTok sent the coin to a two-year high. According to its “Woof Paper,” a total of 1 quadrillion tokens were minted, 50 percent of which was locked into Uniswap with the keys thrown away. The other half, however, was sent to Ethereum co-founder Vitalik Buterin’s wallet in an uninvited fashion.

The intention behind sending 50 percent of the tokens to Buterin was to ensure price stability since ideally, the demand-supply dynamic wouldn’t allow the price to swing rapidly since one entity owns a large portion of the circulating supply.

However, Buterin gave away over $1 billion worth of SHIB to a coronavirus charity in India known as the India Covid Relief Fund. This led to the price of the coin crashing by over 50 percent almost immediately as the market began to panic.

According to the coin’s woofpaper, it claims to be the “Dogecoin Killer,” citing the enormous supply of the token as a differentiating factor between the two. In fact, on May 10, the demand for Shiba Inu grew so much that Binance ran out of ETH addresses since the token is based on the Ethereum blockchain.

Johnny Lyu, CEO of KuCoin — a crypto exchange — spoke with Cointelegraph about the positives of such high demand from retail investors: “It can be considered as a way to quickly learn about blockchain and the cryptocurrency industry. It provides new users with a lower threshold compared to some mainstream cryptocurrencies such as Bitcoin and Ethereum.”

As the token is competing with DOGE, it’s important to assess how it’s performing relative to Dogecoin. At the time of writing, SHIB is trading in the $0.000016 range, amounting to around 10,000 percent of gains in the last 30 days in comparison to around 300 percent gains in the same 30 days for Dogecoin, which is currently changing hands at roughly $0.50. Speaking of Dogecoin’s use cases, Lyu further elaborated:

“Dogecoin has a unique cultural symbol along with abundant application cases. For example, SpaceX announced recently that it will launch the DOGE-1 moon mission, and the cost will be paid by Dogecoin. This will allow more people to learn about and use Dogecoin along with Musk’s preference for Dogecoin.”

DOGE crashed by more than 25 percent following Tesla CEO’s Saturday Night Live appearance where he dropped several references to the meme token. His appearance also led to the price of Tesla dropping 14 percent, thus losing nearly $20 billion in market value.

However, on May 14, Musk made an announcement that he would be working with the DOGE development team to “improve system transaction efficiency.” This news led to the rebound of the token’s price from $0.38 to trading in the $0.50 range as the community envisions further adoption by brands and firms as payment options available to retail investors.

Jake Wujastyk, chief market analyst at TrendSpider — a technical analysis software company — told Cointelegraph that the DOGE price drop before SNL was not a coincidence: “This flush in price to the mid-$0.30s was conveniently timed right before this announcement by Elon Musk.” He further added:

“Dogecoin moved down to the volume shelf around $0.35 earlier in the week (an area where people who originally had profits in the $0.40s+, were back to break even). This is exactly where technical traders should have expected a bounce as supply dried up in this area (due to a lack of profits held by those that held DOGE around $0.35 originally).”

While SHIB is currently the most talked-about dog-themed meme coin apart from DOGE, there are several other highly volatile and speculative dog meme tokens that are floating around in the crypto-verse, which were launched in the hope to replicate the performance of DOGE.

One of the other coins from the same development team as SHIB is called LEASH. This coin has a limited total supply of just 107,647 tokens. Due to this low supply and the hype around the project, the sister token of Shiba Inu has seen astronomical gains of 6,500,000 percent since the beginning of May.

Another such coin is Kishu Inu (KISHU), a token themed around Shiba Inu’s distant relative, the Kishu. The project’s white paper speaks of a farming decentralized application in the future similar to SHIB’s upcoming ShibaSwap marketplace where users can swap the token and even earn rewards through staking. The coin is currently changing hands at $0.00000001, posting over 4,000 percent gains in the last 14 days.

Another coin that is trying to capture the DOGE hype is Dogelon Mars (ELON), a coin based on Elon Musk and his love for space travel. Similar to SHIB’s tokenomics, upon minting, 50 percent of the supply was sent to Buterin’s wallet address, and the other 50 percent was locked on Uniswap in a liquidity pool with an Ether (ETH) pairing. ELON is currently trading at $0.00000070 and has posted over 220 percent gains in the last 14 days.

It doesn’t end there. There are many more projects that are trying to imitate the financial performance of Dogecoin — UnderDog (DOG), Doge Token (DOGET), DogeFi (DOGEFI), DogeSwap (DOGES), PAW Token and ShibaCorgi Token, to name a few. In fact, there is now even a CAT token, which was launched by Netflix show Tiger King star Carole Baskin.

Wujastyk further elaborated on the feasibility of these dog-themed meme tokens: “There are many coins popping up and simply riding the Dogecoin coattails. Most of these coins have no utility at all other than being a vehicle of speculation.” He further added: “These are mostly just coins riding the coattails of the current coin mania. Generally, this does not end well and many new traders will likely get burned.”

Since most of these dog-themed meme coins apart from DOGE are Ethereum-based ERC-20 standard tokens, the hype around them led to additional congestion on the Ethereum network and thus drove up the gas fees. Consequently, the price of dabbling into these coins has now increased substantially.

The blockchain is currently in the process of transitioning to Ethereum 2.0, which will see a proof-of-work consensus model replaced by a proof-of-stake consensus that aims to improve the scalability of the network and thus reduce gas fees for investors. But this process will take some time to conclude.

In the meantime, the general love for dogs and the desire to become quick millionaires like several DOGE investors are leading to meme coins flooding the market. But whether it is just a bubble or if there will be a paradigm shift in crypto due to these tokens remain to be seen. Most likely, Doge will pave the way for these coins and decide their future based on its own adoption and price action.

Disclaimer: The coins described above are highly volatile and speculative in nature. This article is not an endorsement of these coins. If you opt to trade any of these coins, do so at your own risk.

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PBOC Instructs China’s Banks to Forbid All Cryptocurrency Related Activities Immediately

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China’s central bank has sent notice to the country’s financial institutions instructing them to stop dealing with cryptocurrency transactions.

The disclosure notes that the People’s Bank of China (PBOC) aims to protect Chinese citizens and “combat the speculation of Bitcoin and other virtual currency transactions.”

On June 21, 2021, the People’s Bank of China (PBOC) issued a notice to a number of financial institutions concerning crypto transactions.

The PBOC says it has discussed the issue of cryptocurrencies with financial services firms like the Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank, Postal Savings Bank, Industrial Bank, and the Alipay (China) Network.

The PBOC stressed that “virtual currency trading activities disrupt the normal economic and financial order, breed the risks of illegal cross-border transfer of assets, money laundering and other illegal and criminal activities, and seriously infringe the people’s property safety.”

China’s payment institutions and banks must implement strict guidelines on “bitcoin risks,” “token issuance financing risks,” and other regulatory requirements the PBOC notice details.

Financial institutions “must not provide account opening, registration, and registration for related activities,” the central bank added.

China’s Postal Savings Bank followed up with a statement and explained that it will not allow cryptocurrency transactions in any manner.

“According to relevant regulations of the People’s Bank of China, no institution or individual may use our bank’s accounts, products, services, and channels to conduct token issuance financing and ‘virtual currency’ transactions,” China’s Postal Savings Bank said.

The Postal Savings Bank also said if Chinese citizens notice crypto activity or any virtual currency “related behavior, you can report it to our bank.”

The PBOC news follows the June 20 mandate from Sichuan officials that banned bitcoin mining in the region. Since the banning in five major Chinese provinces, Bitcoin’s hash rate has plummeted to 100 exahash per second (EH/s).

Chinese journalist Colin ‘Wu’ Blockchain also tweeted about the PBOC notice on Monday and said two other financial institutions released statements concerning the subject. “The Agricultural Bank of China once again released the deleted webpage, and Alipay also issued a related statement,” the regional reporter said.

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Microstrategy Buys $489M Worth of Bitcoin —Now Holds 105,085 BTC

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The independent, publicly traded business intelligence company Microstrategy announced the acquisition of 13,005 bitcoin on Monday, at a purchase price of approximately $489 million in cash.

The company’s CEO Michael Saylor revealed the latest purchase on Twitter, and the firm now has more than 100,000 bitcoins on its balance sheet.

Michael Saylor’s firm Microstrategy now has approximately 105,085 bitcoins which it bought for around $2.741 billion. Using the purchasing average, the company says it purchased all the BTC at around “$26,080 per bitcoin, inclusive of fees and expenses.”

As usual, Microstrategy CEO Michael Saylor tweeted about the purchase telling his 1.2 million Twitter followers. “As of 6/21/21 we #hodl ~105,085,” Saylor noted on Monday morning.

Not everyone was impressed with Microstrategy’s bitcoin buy announcement and a few people like Peter Schiff made snide comments. “That’s pretty bearish that you already bought all that bitcoin and the price kept dropping anyway,” Schiff replied to Saylor’s tweet on Monday.

“Consider where the price of bitcoin would be today if Elon Musk, Michael Saylor, Barry Silbert, and all the other bitcoin elites and their friends in the financial media hadn’t spent the last six months convincing retail and institutional investors to buy their worthless tokens,” Schiff said the day prior, as bitcoin’s price began plummeting.

Northman Trader’s Sven Henrich also responded to Saylor’s announcement. “Understand the conviction. Question though: As the price average and employed leverage have both been rising what’s the risk profile/consequence if bitcoin were to drop below the average holding price?” Henrich asked the Microstrategy CEO.

When someone asked Henrich if Saylor’s choice turned out to be a good bet the Northman Trader further commented. “Not saying he’s wrong,” Henrich replied. “Just asking what the risk profile is if [the] price drops below the average holding price.”

Microstrategy’s purchase of 13,005 BTC follows recent news stemming from China’s central bank. On June 21, 2021, the People’s Bank of China (PBOC) issued a notice to a number of financial institutions concerning crypto transactions.

Since then, BTC has dropped 4 percent in 24 hours and rests just above the $32K handle. In other words, the price has actually dipped below the price Microstrategy paid per coin for this most recent BTC acquisition.

Other bitcoin proponents also responded to Saylor’s tweet. “Time to deploy the next billion,” software developer Jameson Lopp tweeted. An individual commented on Lopp’s statement and jokingly said: “Fixed it: Time to deploy the next borrowed billion.”

“Unfortunately, contrary to popular belief one just can’t keep infinitely buying the dip,” an individual said to the many enthusiasts telling the Microstrategy CEO to “keep buying the dip.”

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The US Government Auctions $377K Worth of Bitcoin and Litecoin

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The U.S. government sold Bitcoin and Litecoin worth $377K via the General Services Administration (GSA). The auction closed at 5 p.m. on Monday. The government auction house has sold digital assets in 11 lots and so far, the lots have seen active bidding.

From June 18 to Monday, June 21, the General Services Administration, otherwise known as the GSA, auctioned two types of crypto assets. GSA auction bidders buy 11 lots of crypto that hold approximately 8.93 BTC and 150.2 LTC.

The U.S. government estimates the value to be in the ballpark of $377,000 for the aggregate BTC and LTC lots. The GSA announcement notes that the entity has sold crypto assets on behalf of the U.S. government since the beginning of 2021.

To date, the GSA has auctioned crypto assets three times and sold 16.99 BTC in total. The three previous GSA auctions settled at $937,092 for the bitcoin assets sold on the platform. The GSA advertisement also tries to entice the reader by saying: “Become a part of the growing cryptocurrency community by placing a winning bid during GSA Auctions’ next cryptocurrency sale.”

“Experienced investors recognize a good opportunity when they see it, which is why our auctions have generated so much enthusiasm among the crypto community,” Thomas Meiron, Regional Commissioner for GSA’s Federal Acquisition Service said in a statement. “With the addition of a new type of cryptocurrency, this promises to be one of our most exciting auctions of the year.”

The new type of digital asset Meiron refers to is Litecoin (LTC), as prior auctions only saw the sale of BTC. The GSA was created in 1949 and is a solution for government-owned surplus, forfeited goods, and federal personal property they no longer require.

The independent agency of the U.S. government allows the general public, businesses, and other government agencies to bid on items in an exclusive fashion. Local and international GSA auction buyers are mandated to purchase electronically.

The electronic only-purchasing arrangement is due to the President’s declaration of a national emergency on March 23, 2020. Since then, the GSA no longer accepts payments made by cash, money order, cashier’s check, and official or personal checks.

The description of the crypto lots being sold explains that when a bidder wins they must accept the responsibility of paying the mining network fee. Bidding has been active so far and dozens of offers have been made on the GSA’s current stash of digital assets.

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