Are meme coins back, as Shiba and Doge rocket upwards? Eh…no

Are meme coins back, as Shiba and Doge rocket upwards? Eh…no

By Dan Ashmore - min read
Updated 22 April 2024

Key Takeaways

  • 2023 has started hot in the crypto markets, with meme coins printing significant gains
  • Softer macro climate has fuelled gains
  • Shiba Inu has spiked 50% , with hype also around the launch of a Layer-2 ecosystem
  • Our Analyst warns investors that all may not be what it seems, however


It feels a little crazy to be writing this, but here we are anyway. 2023 is off to a flyer in the crypto markets, with optimism abounding that softer inflation data will lead to a loosening of monetary policy sooner than the market previously anticipated.

And one such “asset class” to benefit is that of memes. Doggy coins are printing returns that are straight out of Q1 of 2021, a time when Reddit was going to war with Wall Street over GameStop, Elon Musk was tweeting daily about fluffy dogs and, well, the money printer was firmly switched on.

The king and queen of the space, that is Dogecoin and Shiba Inu, are currently up 22% and 49% respectively this year.

Bonk the latest meme to join the party

Perhaps the curious case of Bonk sums up this bizarre resurgence best. The meme coin, inspired by Shiba Inu, was launched on Christmas Day on Solana. You know,  that same Solana which was firmly in the wars, suffering from its close ties with Sam Bankman-Fried, repeated outages shutting down the network and seeing several of its top projects flee for rival blockchains.

Objectively, launching on Solana – and in the depths of the bear market, no less – was an objectively strange decision. And yet, what is logic in the crypto meme market? The coin was up 2500% within ten days, exploding upwards past a $200 million market cap. It has since fallen back to Earth a little but is still trading at a $50 million market cap.

Why are memes doing so well?

But why are meme coins doing so well? Well, the first answer is that the entire crypto market is. When looking at even the biggest cryptos, they are all printing impressive returns. Memes don’t look so dizzying in comparison.

The surge is due to inflation data coming in below expectations. While figures are still extreme, and well north of the 2% target of the Fed, there are perceptible signs that it has peaked. Investors have taken this as a sign that the death sentence for risk assets, that is high interest rates, may peel off sooner as a result.

Shiba Inu, for its part, is surging off more than just positive macro factors. It has jumped 20% after news that it will be listed on Upbit, the most popular South Korean exchange. This comes amid hype around the upcoming and much-anticipated Shibarium Beta launch.

Shibarium Beta will be a layer-2 network built on top of Ethereum, the same way Polygon and Arbitum work.

Is this sustainable?

Personally, I can’t put too much weight into this (still mysterious) Layer-2 project from Shiba. Memes are exactly that – memes – and these were never a fundamental play. It would take a lot more than blind speculation about Sihbarium to convince me that Shiba will ever be used for anything other than trying to buy it with the hope of selling it on a greater price.

But that is the thing with memes. There has never been an argument here that there is any value. They’ve always been a sort of middle finger to prudent investing, a misbehaving younger sibling to the “responsibility” of actual investing.

However, this is all fun and games in a climate printing more cash than at any point in history. It’s all great when interest rates are zero and cheap capital is ubiquitous. And it’s amazing when a pandemic strikes the world, with millions of people locked down with nothing to spend their stimulus cheques on.

Unfortunately, that is not the world we live in any longer. I’ve said it before and I’ll say it again – the joke is over with memes. They no longer present as a chance to strike retirement gains. They were always a reckless gamble, and that is fine. But now they are no longer this novel source of endless entertainment, they’re just kind of sitting there as the world deals with the worst economy since crypto was launched when Bitcoin went live back in 2009.

Things may be more optimistic than they were a month or two ago. But inflation is still crippling, despite the fact it has slightly fallen. Rates are still high and there are a million variables that could make this volatile economy a lot worse in a very short space of time.

It’s hardly jaw-dropping to say, but be careful with the doggy tokens. When the music stops – and it always does – it’s not a fun place to be.