Last June, I compared two of the crypto market’s most divisive meme coins: Dogecoin (CRYPTO: DOGE) and Shiba Inu (CRYPTO: SHIB). Both of these canine-themed coins were created as parodies of other coins. Dogecoin was introduced as a parody of Bitcoin (CRYPTO: BTC) in 2013, while Shiba Inu was launched as a parody of Dogecoin in 2020.
Both of these coins were initially dismissed as speculative short-term plays. But if you had invested just $100 in Dogecoin at its earliest price of $0.0002, your investment would be worth about $75,000 today. If you had invested that $100 in Shiba Inu at its earliest trading price of $0.000000000051 per coin, your investment would have blossomed to a whopping $27.86 million today.
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The last time I compared these two tokens, I argued that Shiba Inu was a better buy than Dogecoin because it had more catalysts on the horizon. But since then, Shiba Inu’s price has declined 15% while Dogecoin’s price rose 83%. Let’s see why the parody of a parody outperformed the original — and if it will remain the better meme coin this year.
The main differences between Dogecoin and Shiba Inu
Dogecoin and Shiba Inu were both inspired by the popular “doge” meme, which featured a Shiba Inu dog. But the two coins were built on completely different blockchains.
Dogecoin was created from the open source code for Litecoin (CRYPTO: LTC), which was forked from Bitcoin’s blockchain in 2011. Therefore, it’s also a proof-of-work (PoW) token that needs to be mined like Bitcoin. But unlike Bitcoin, which has a supply limit of 21 million tokens, Dogecoin is an inflationary token without a maximum supply. Its own hashing algorithm, Scrypt, also consumes less power than Bitcoin’s blockchain and facilitates faster and cheaper transactions, which makes it an appealing alternative to Bitcoin for smaller crypto payments.
Dogecoin attracted big endorsements from celebrities like Elon Musk, Mark Cuban, and Snoop Dogg in the past. Musk had Tesla (NASDAQ: TSLA) start accepting Dogecoin as a payment option for some of its products last year, and he even named the Trump Administration’s controversial Department of Government Efficiency (DOGE) after the meme coin. That mainstream attention drove its price higher.
Shiba Inu was built on the Ethereum (CRYPTO: ETH) blockchain, which pivoted from the energy-intensive PoW mechanism to the more energy-efficient proof of stake (PoS) mechanism in 2022. Its entire supply of nearly one quadrillion tokens was pre-mined on the Ethereum blockchain prior to its launch, and it can now only be “staked” — locked up for interest-like rewards on its blockchain — instead of being actively mined like Dogecoin or Bitcoin.
Shiba Inu was designed to be a deflationary token. Its owners periodically “burn,” or remove from circulation, its tokens to tighten up its supply and increase the value of its remaining tokens. More than 40% of its tokens have already been burned since its public debut.
Since it was built on Ethereum, it also supports smart contracts that are used in the development of decentralized apps (dApps), new tokens, and other crypto assets. Those applications could make it a more useful token than Dogecoin.
In 2023, it launched Shibarium, a Layer-2 blockchain network that supports faster transactions and lower fees, to attract more developers. Last August, it rolled out ShibaDEX, a cross-chain decentralized exchange (DEX) that reaches beyond its native ShibaSwap DEX and acts as an official cryptocurrency wallet for its own tokens.
Which meme coin has more near-term catalysts?
Dogecoin and Shiba Inu could both benefit from the Trump Administration’s friendlier stance on cryptocurrencies. The appointment of Paul Atkins, a big supporter of the crypto market, as the new chairman of the Securities and Exchange Commission (SEC), strongly indicates that the regulatory headwinds for the broader crypto market will dissipate over the next few years.
In the near future, Dogecoin could benefit from its integration into Musk’s X platform for digital payments, its increased adoption among retailers, and upgrades to its security, speed, efficiency, and scalability. The persistent rumors of a Dogecoin ETF or Musk’s unpredictable posts about Dogecoin on X could drive its price even higher.
For Shiba Inu, its near-term catalysts include the continued expansion of Shibarium, its ongoing token burns, the expansion of its metaverse platform (which sells virtual land and assets), and its long-awaited ShibaSwap 2.0 upgrade for its native DEX. There have also been persistent rumors regarding a Shiba Inu ETF, but that probably won’t happen until Dogecoin and the other bigger altcoins get their own ETFs. Without a big celebrity backer like Elon Musk in its corner, Shiba Inu could have a tougher time attracting as much attention as Dogecoin this year.
Which meme coin is the better buy right now?
Dogecoin and Shiba Inu are both still too speculative for my tastes. But if I had to choose one to hold for the next 12 months, I’d buy Dogecoin because it has clearer catalysts. Shiba Inu might keep expanding, but it faces too much competition from similar Ethereum-based tokens. It also isn’t generating enough hype in a market where the winners rely heavily on social media buzz.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Tesla. The Motley Fool has a disclosure policy.
