On Wednesday last week, Binance subsidiary WazirX in India suffered outages due to excessive demand for Shiba Inu. The platform’s servers went down and trades were delayed. The exchange supported trading volume of more than half a billion, the highest of any crypto exchange in India, CoinDesk reported.
Siddharth Menon, WazirX cofounder and COO, told CoinDesk:
It basically brought down our exchange. The kind of active numbers and the active users that we saw in the last 48 hours has actually shocked us. We were not ready for it. We were all ready for the bitcoin move, but we were never ready for Shiba Inu.
He added that unit bias was at least partly to blame. Unit bias is where a newbie trader buys a lot of one kind of crypto because of its low price per unit, as with Shiba Inu, even though they can buy the same dollar amount of a bigger coin, like Bitcoin. This makes them feel richer.
Whales are sticking to Bitcoin and Ethereum
Although more and more investors are embracing Dogecoin and Shiba Inu, the largest ones are sticking to the familiar Bitcoin and Ethereum. Average trading volume shows as much. Ethereum and Bitcoin average trade sizes remain bigger than those of the memecoins on almost every exchange.
For example, Coinbase data shows the biggest crypto’s average trade size is around $2,000, ETH trades average $1,600, and Dogecoin and Shiba Inu are at around $800 each.
According to Clara Medalie of Kaiko, a digital asset data provider, the price action is mostly driven by retail:
It is interesting to note that average trade size for nearly all assets has increased considerably since the start of the bull run last November. With meme tokens such as DOGE and SHIB, we can observe spikes during the initial fervor and then sharp declines once the excitement wears off. We can also observe that Bitcoin, Ethereum and Doge seem to have similar trend lines for average trade size, strongly correlated to mini-bull runs.
Meme coins: a gateway for experience
Eventually, newbie traders will realize that a cheap meme coin will never pass Bitcoin or Ether. They will finally gain some perspective, do away with unit bias, and use meme coins to develop proper trader discipline. These coins can serve as the gateway for small investors to become more experienced.
If you want to invest in SHIB, you might be interested in automated cryptocurrency trading robots such as Bitcoin Profit, Bitcoin Revolution and Bitcoin Trader.
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