In the fast-moving world of cryptocurrencies, kingdoms can rise and crumble in the space of months or days. It’s in that spirit that Shiba Inu (SHIB), a Dogecoin-inspired token, surged past its original inspiration by market cap this week, which is the total value of all tokens in circulation.
The market for SHIB is now worth about $30 billion, with 1 SHIB going for around $0.000068, according to CoinGecko, down from its $0.00008 peak. And amid the flurry surrounding these tiny shifts, at least one major token-holder has become a multi-billionaire in SHIB, showing how concentrated markets for emerging tokens can be.
One wallet, which went viral on Twitter, bought $8,000 worth of SHIB since last August, and then didn’t touch their investment for more than 200 days. Now, their 70 trillion coin hoard has a value floating between $5 billion and $6 billion USD. There are approximately 549 trillion SHIB tokens in circulation, meaning this wallet controls roughly 12 percent of all circulating Shiba Inu coins.
That’s a lot. By contrast, Bitcoin inventor Satoshi Nakamoto is estimated to control 1 million bitcoins, an unbelievable hoard that is thought to have never been moved, and even that only accounts for 5 percent of all tokens in circulation. The top corporate holder of Bitcoin, MicroStrategy, holds just over 100,000 BTC, accounting for .5 percent of all bitcoins.
It’s one thing to be a billionaire on paper, but could the SHIB actually realize those gains? Social media is awash in memes half-joking that the unknown whale couldn’t unload all their tokens without crashing the market for SHIB.
They may be right. If the wallet holder decided to unload all 70 trillion coins at once using Uniswap, a decentralized exchange, they might have some luck but at a steep cost. The site’s interface reveals that to swap that much Shiba for USDC, a stablecoin, there would first be a fee of roughly $3 million given the size of the transaction. Second, Uniswap estimates the trade would result in a shocking price impact of negative 99 percent, leaving the SHIB seller with roughly $5 million in USDC. (SHIB also trades on Binance and Coinbase Pro.)
Beyond speculation over the possible market impacts of selling so many tokens at once, Twitter users pointed out that being a sudden billionaire can come with other headaches. “That's about $7 billion in unrealized taxable gains,” one user wrote.
Indeed, U.S. Treasury Secretary Janet Yellen signaled the government was looking into taxing unrealized gains earlier this week and sent some crypto investors into a frenzy with one enthusiast insisting it proved the Biden administration was “willing to annihilate all investor sentiment in order to raise money to fund their reckless spending spree.”