WazirX rides the Shiba Inu wave; records highest daily trading volume

Mumbai: WazirX, India's largest cryptocurrency exchange, recorded its highest daily trading volume of $562 million between Wednesday and Thursday.

Meme coin Shiba Inu’s volume alone was about $338 million of the total, the company said.



A meme coin is a cryptocurrency that is based on a meme or that is created as a joke.

WazirX chief executive Nischal Shetty said its price was driven higher by its “hardcore community”. Avinash Shekhar, Co-CEO of ZebPay, that listed the token on its exchange two weeks ago due to high demand from investors, said that the spike in prices by 100% in the last two weeks, is causing more people to get into an asset with its price on the rise.

"The social media buzz and celebrity endorsements are a huge moving factor for meme coins. In addition to that, the cheap price of these coins in comparison to well-known cryptos like bitcoin or ethereum also contributes to the interest of the people. FOMOing into an asset that is trending is another big reason that gets more investors to experiment with these coins," said Shekhar.

Shiba Inu was launched last year as a community-driven coin without a founder. The coin pitches itself as the Dogecoin-killer, another meme coin with the dog Shiba Inu logo which shot to fame this year after Tesla cofounder Elon Musk publicly endorsed it on Twitter.

Its prices were on the up because the community was adding use cases for Shiba, like decentralised exchange Shibaswap, Shetty said.

On Thursday, the coin briefly was in the top 10 most valuable cryptos in the world by market capitalisation.

Unlike other cryptocurrencies that are either in limited circulation – making them a storehouse of value–or have use cases like smart contracts, Shiba Inu has a supply of one quadrillion. It has doubled its value in the last week. Its price was Rs 0.0006 as of writing this story.

Industry stakeholders have said that in the absence of regulations or adequate warnings, meme coins can prove risky for novice investors and the likelihood of it being a “pump and dump” scheme is quite high.

“Essentially, there is a lot of speculation that goes on in meme tokens and stocks. There is literally no value add or worth. It is mostly around speculation. Most people who invest in this probably do it for fun,” said Edul Patel, cofounder of Mudrex, an automated trading platform. “Meme coin solves for that very specific attraction that users have to speculation and do things just for the sake of fun.”

There have been several instances this year when the traditional notion of money and investment has been broken, beginning with the GameStop short squeeze when a group of Redditors pumped a video game stock to record highs.

Patel added that Mudrex had introduced “Coin Sets” – which act like baskets of crypto tokens based on a theme.

Over the previous month, the platform had added high-risk sets “To The Mooooon” and “New Crypto start” and Shiba Inu could enter the set this week, Patel said.

In the United States, a petition by retail users has garnered over 300,000 requests to brokerage app Robinhood Markets Inc to list the Shiba Inu coin.

The app has become hugely popular amongst traders betting on speculative stocks and cryptocurrency. In fact, Dogecoin was responsible for 61% of crypto-transaction revenue at Robinhood in the second quarter of this year.

In an earnings call, Robinhood's chief executive Vlad Tenev said the company would remain cautious about adding new coins, especially if they risk raising concerns from regulators as unregistered securities.

Shiba Inu gained prominence in India earlier this year when Vitalik Buterin, cofounder of Ethereum, donated $1 billion worth of Shiba Inu coins to India’s Covid Crypto Relief Fund.