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Will Memecoins Like Dogecoin and SHIB Bounceback in 2023?

By Evan Jones04/04/2023

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Dogecoin (DOGE) and Shiba Inu (SHIB) had 2021s to remember. The former hit what seemed like an impossible all-time high of just under 74 cents US in May of 2021, while the latter hit $0.00008845 US (for perspective it launched at $0.000000000082). With the success seen by Dogecoin in 2021, it was only a matter of time before a competitor started to make waves too. Following the success of Dogecoin, SHIB became a popular choice for traders who felt they had missed the boat with Dogecoin, and those that were willing to gamble on it at the right time likely hit a nice profit. If you had invested $1,000 in SHIB at launch, you would have been able to cash out a billion dollars when SHIB hit its all-time high in October 2021. 

Both Dogecoin and Shiba Inu have fallen fairly from their highs, like the rest of the digital asset market. This leaves people to wonder if there’s a chance for these two assets to rebound. In this piece, we’ll discuss each asset before examining how 2022 went for the two assets, and their future outlooks. 

Dogecoin (DOGE) vs Shiba Inu (SHIB)

Dogecoin (DOGE)

Dogecoin (DOGE) was created in 2013 by Jackson Palmer, an Adobe software engineer, and Billy Markus, an IBM software engineer. Dogecoin is a spin-off of Bitcoin, and it took about 3 hours to change the original Bitcoin code to create Dogecoin according to Markus. The Dogecoin blockchain network launched in December 2013, reaching its aforementioned all-time high of almost 74 cents USD in May 2021. DOGE is currently trading under 10 cents a piece, a mark it has been unable to stay above for nearly a whole year now. 

Dogecoin uses a proof of work consensus mechanism just like Bitcoin, but with blocks being mined every minute (rather than every 10 like Bitcoin) and 10k DOGE entering circulation through each block reward. Markus and Palmer stepped away from Dogecoin in 2015, while notable figures such as Mark Cuban and Elon Musk have stepped in to champion the memecoin. 

Shiba Inu (SHIB)

Shiba Inu (SHIB) was created in August 2020 by a pseudonymous person who goes by “Ryoshi”. The aim was to create a direct competitor to the original meme coin that is Dogecoin. SHIB began with a total supply of 1 quadrillion SHIB. A quadrillion has 15 zeros or is 1,000 trillion in other words (for reference DOGE has only 132 billion circulating). Half of the initial supply was put into Uniswap for liquidity pool purposes. The other half was sent to Ethereum creator Vitalik Buterin with the hopes that he would burn it. Buterin burned over 400 trillion SHIB while selling the remainder and donating the proceeds to Covid relief in India. Like Dogecoin, SHIB has fallen far from its aforementioned all-time high.

SHIB is an ERC-20 token, meaning it uses the Ethereum blockchain network. This gives it more potential utility than DOGE because it can take advantage of smart contracts. However, considering both the difference in supply, and the difference in transaction fee costs (much cheaper on DOGE network than Ethereum), DOGE is likely a better coin for microtransactions than SHIB. This could change when Ethereum implements more changes to the network over time. 

How the Memecoins Fared in 2022

Like the majority of the crypto market, neither DOGE or SHIB had a 2022 to remember. DOGE began the year below 20 cents US, already down significantly from its high just 7 months earlier. DOGE finished 2022 at a price of about 7 cents US.

SHIB didn’t fare much better. It began 2022 at around $0.000034. Like DOGE, this was already a significant drop for SHIB from its high that was just two months before. It finished 2022 at a price of about $0.000008 US.

Outlook for Memecoins in 2023 and Beyond

While both assets didn’t perform particularly well in 2022, one might chalk it up to the overall cryptocurrency market’s health during that same timeframe. However, if you compare them to something like Bitcoin and its value performance during the same timeframe, the value losses are significantly higher for the memecoins. Bitcoin is only really down about 30% from its price to start 2022, whereas both SHIB and DOGE are down about 75% and 65%, respectively. 

The issue for memecoins is that they tend to have an outrageous supply which creates a lot of selling pressure. Consider just the amount of SHIB in circulation. Even with 400 trillion burned by Buterin, that leaves 600 trillion circulating. The 132 billion DOGE in circulation pales in comparison to 600 trillion. What makes it hard for DOGE to avoid selling pressure is the 10k block reward happening every minute. This adds about 14 million DOGE to circulation every day. There is no cap of DOGE’s supply, meaning that injection of supply will never stop.

Long-term this is unlikely to change. While the coins may see rises in falls in value over the next year and beyond, there is little fundamental reason for them to rebound in a meaningful way. That could change if either coin makes changes to what they can do or where they can be used, but until then, their outlook isn’t glowing.

Closing Thoughts: Still a Risky Bet

The reality of both DOGE and SHIB’s outlook is that despite their history of reaching seemingly unattainable highs, they may never get close to them again. In this sense, the idea that either asset is a good investment or will bounce back anytime soon is pure speculation. Neither of the memecoins brings anything particularly innovative to the digital asset sector. Rather, they are fun assets that you can speculate on for very little money, which leads to unit bias for many newcomers. 

While some retail investors enjoy the idea of buying millions of one asset for the same price as a fraction of a Bitcoin, there should be more weight behind your investment strategy than getting a lot of units of something. Time will tell whether either asset can have a bounceback. 

Article tags

Dogecoin
investment
memecoins
SHIB
Evan Jones

Author

Evan entered the crypto scene in 2017, attracted to the many disruptive possibilities that blockchain could have on current world systems. He has a keen interest in decentralized services, payment processing, and viable NFT use cases such as event ticketing. He spends his days writing with his dog Kobe under his feet, if not on his lap.

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