Dogecoin vs. Shiba Inu: Why DOGE Barked Louder Than SHIB in the 2022 Crypto Winter

In the wild world of cryptocurrency, where fortunes can be made and lost in the blink of an eye, 2022 was a year of significant upheaval. Amidst the market turmoil, a surprising underdog emerged – or should we say, under-doge? Yes, we’re talking about Dogecoin (DOGE). While the crypto sphere braced for impact, DOGE not only weathered the storm but seemingly wagged its tail in defiance, outperforming its meme-coin rival, Shiba Inu (SHIB). Let’s dive into why Dogecoin showed unexpected resilience while SHIB struggled, despite its ambitious ecosystem developments.

The Crypto Crash of 2022: A Tale of Two Memes

2022 was undeniably a challenging year for the crypto market. Major cryptocurrencies experienced significant price drops, and the overall sentiment was bearish. However, within this downturn, Dogecoin demonstrated a surprising level of strength. While most assets bled red, DOGE managed to hold its ground better than many, even outperforming some of the crypto giants.

Let’s take a look at how Dogecoin fared against some of the top cryptocurrencies in 2022:

As the data clearly indicates, DOGE stood out as a relatively strong performer within the top ten cryptocurrencies by market capitalization. It experienced a 58% drop, which, while still significant, was less severe than the losses seen by Bitcoin, Ethereum, and many other prominent altcoins. In fact, DOGE was the third-best performer in the top ten, only trailing behind XRP and BNB.

Why Did Dogecoin Hold Up Better Than Expected?

This raises a crucial question: Why did Dogecoin, a cryptocurrency often dismissed as just a meme, exhibit such resilience? Especially when compared to Shiba Inu, which has been actively building a more robust ecosystem?

Here are a few factors that might have contributed to Dogecoin’s surprising performance:

• The Power of Memes and Community: Dogecoin’s origins are deeply rooted in internet culture and humor. This has fostered a strong and loyal community that is less driven by technical fundamentals and more by sentiment and online trends. In times of market uncertainty, this dedicated community can provide a level of price support.
• Simplicity and Accessibility: Dogecoin’s simple design and low transaction fees make it easily accessible to newcomers in the crypto space. It’s often seen as a fun and less intimidating entry point compared to more complex cryptocurrencies.
• Elon Musk’s Endorsement (Speculation): While there haven’t been concrete developments, the ongoing speculation about DOGE potentially, possibly, one day being integrated with Elon Musk’s Twitter keeps Dogecoin in the spotlight. Musk’s previous tweets and endorsements have demonstrably impacted DOGE’s price, and even the possibility of future integration can fuel positive sentiment.

Dogecoin Hodlers: Mostly in the Green?

Adding to the intrigue, data from Intotheblock (ITB) reveals a fascinating insight into Dogecoin holders. According to ITB, the majority (54%) of DOGE holders are currently “in the black” at the current price of $0.07. This means that more than half of DOGE holders are sitting on profits, while 3% are breaking even, and 43% are in the red.

To put this in perspective, ITB data also shows that 46% of BTC holders and 47% of ETH holders are currently in profit. This highlights that Dogecoin’s holder profitability is actually quite comparable to, and even slightly better than, that of Bitcoin and Ethereum, despite DOGE’s reputation as a highly volatile meme coin.

These figures from ITB are based on analyzing the average purchase price of tokens in tracked wallets and comparing it to the current market price. This provides a valuable snapshot of the overall profitability of holders for different cryptocurrencies.

Shiba Inu’s Ecosystem Efforts: Why Didn’t They Translate to Price Resilience?

In stark contrast to Dogecoin’s relatively stable performance, its main competitor, Shiba Inu, struggled significantly in 2022. Despite the Shiba Inu community’s active development of an L2 network (Shibarium), a metaverse (SHIB: The Metaverse), and blockchain games, SHIB’s price experienced a steeper decline.

According to ITB data, Shiba Inu is down 76.1% in the last year, with only 14% of hodlers in profit, 4% breaking even, and a whopping 82% in the red. This paints a picture of a community facing significant losses, despite the efforts to build out the Shiba Inu ecosystem and enhance its utility.

Why did Shiba Inu’s fundamental developments fail to provide the same level of price support as Dogecoin’s meme appeal?

• Market Sentiment Shift: The overall market downturn might have overshadowed the positive developments within the Shiba Inu ecosystem. Bear markets tend to be less forgiving, and even positive news can struggle to move prices upwards.
• “Buy the Rumor, Sell the News” Effect: Perhaps some of the anticipation for Shibarium and other ecosystem developments was already priced into SHIB earlier, and the actual launches didn’t live up to the heightened expectations in a negative market environment.
• Meme Coin Volatility: Both DOGE and SHIB are meme coins, inherently prone to high volatility. While DOGE’s meme appeal seemed to act as a buffer in this instance, SHIB’s, coupled with market conditions, may have amplified the downside.

Fundamentals vs. Memes: A Crypto Market Paradox?

The contrasting performance of Dogecoin and Shiba Inu in 2022 presents an interesting paradox in the crypto market. While Ethereum focused on significant fundamental upgrades like reducing its energy consumption by 99% this year, thanks to The Merge and a slew of layer 2 projects, and Shiba Inu worked on expanding its ecosystem, Dogecoin, with relatively little fundamental news, demonstrated surprising price resilience. It appears, at least in this instance, that fundamentals, it seems, lack the power of memes.

This isn’t to say that fundamentals are irrelevant in the long run. However, it highlights the significant role that community sentiment, meme culture, and market narratives can play in the short-to-medium term crypto price action. The crypto market is a complex and often irrational space, where viral trends and social media buzz can sometimes outweigh traditional investment metrics.

Conclusion: The Unpredictable Nature of Crypto

The story of Dogecoin versus Shiba Inu in 2022 serves as a compelling reminder of the unpredictable nature of the cryptocurrency market. While Shiba Inu diligently worked on building utility and expanding its ecosystem, Dogecoin, fueled by its meme origins and community support, unexpectedly outperformed its rival during a significant market downturn.

Whether this trend will continue, or if fundamentals will eventually regain dominance, remains to be seen. One thing is clear: in the crypto world, sometimes, the dog with the best meme can indeed bark the loudest, even in the face of a crypto winter.