Arguably the single greatest trade of all time was just confirmed in the news! The owner that flipped $8K worth of Shiba Inu into $5B removed nearly $3B of the coin from the original wallet. The whale owns 7% of all $SHIB! Investors were eager to see what the billionaire would do with their $SHIB after learning of their legendary gains.
The Shiba Inu cryptocurrency has highly concentrated ownership. According to CoinMarketCap.com, the top ten wallets possess about 72% of $SHIB, with over 870,000 total wallets holding it. The largest wallet owns 41%, which was valued at $21 billion at its peak. These whales own so much $SHIB they could move the price up or down with a single trade. What if these Shiba whales decide to sell their coins?
Shiba Inu isn’t the first cryptocurrency to raise concerns about extreme concentrations of ownership. For example, whales heavily affected the price of Bitcoin and Ethereum at first. However, since then, as more players have entered the crypto market, their ownership concentration has fallen.
Many areas of the crypto market remain highly concentrated in terms of coin ownership. For example, on decentralized finance (Defi) platforms, users can issue their own coins to allow individuals to trade, lend and borrow from one another. And many of these smaller cryptos on Defi applications are majority-owned by a tiny number of wallets.
Earlier this week, we saw how investing in these smaller cryptos on Defi platforms can go wrong when the $SQUID coin plunged to $0, stealing investors’ funds. So, do you think investing in these smaller cryptocurrencies is worth the risk if you can flip $8K to $5B?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.