Hedge fund manager Michael Burry, known for predicting the financial crisis in 2008, recently commented on the controversial cryptocurrency Shiba Inu.
His view of Shiba Inu
Well-known investor and founder of the private investment company Scion Asset Management, Michael Burry, commented on the Shiba Inu token on Saturday after this cryptocurrency competing with Dogecoin increased by 230% in the last week. Burry is known to be the first investor to have anticipated and benefited from the US subprime mortgage crisis of 2007-2010.
The “Big Short” investor states that Shiba inu is a token that aspires to be an alternative to Dogecoin (DOGE). Unlike BTC, whose final amount is only 21 million, Shiba is known for a huge number of coins – currently in circulation 394,796,000,000,000 (almost 400 trillion), while Total Supply is 1,000,000,000,000,000,000 (1 billion) Burry wrote:
“It is said that one billion seconds is about 32 million years. One billion days is 2.7 trillion years. By comparison, the entire age of the universe is estimated at 13.8 billion years. “
He wanted to point out the nonsense and the huge number of tokens. However, several people quickly alerted Burry on Twitter that the current amount of SHIB in circulation was no longer one billion. As we wrote above, there are currently 394.8 trillion coins in circulation. The Shiba Token website explains that their founder Ryoshi locked 50% of the coins in Uniswap, then “burned” the other half of Vitalik Buterin for safekeeping. The Shiba Inu token came to the fore a few months ago after Buterin donated $ 1 billion worth of SHIB to the Indian Covid Fund.
Burry had previously warned against investing in cryptocurrencies. In June, he predicted a huge drop, noting that the problem of cryptocurrencies is – as in most areas – the leverage effect. The “Big Short” investor also warned that governments could destroy cryptocurrencies, including BTC. However, he explained that it does not degrade cryptocurrencies, because anything is possible in the short term.
Low price does not mean great potential
Especially for newcomers, we find that they evaluate the potential of cryptocurrencies according to the price of one token. This is the biggest mistake, because it is this weakness that attracts unsuspecting investors with various new fraudulent cryptocurrencies. If you look at new meme coins and similar “cryptocurrencies”, each has a meaningless number of tokens, where if you invest a few tens of dollars, you will get several million tokens.
The following sweet talk type that target is 1 cent, or one dollar. This is, of course, total nonsense, because this nonsense would have to have a higher market capitalization than BTC. And let’s be honest – it’s 3 more likely that 3 meteorites will hit your house in an hour than that such token will overtake BTC.
Remember that ALWAYS calculate the potential appreciation from the market capitalization of a given token (market cap), not from the price of one token. Here is an illustrative example:
1 ADA currently costs $ 2.22, with a capitalization of $ 71 billion.
1 EGLD currently costs $ 245, with a capitalization of $ 4.8 billion.
A newcomer would probably buy an ADA because EGLD is “expensive”. He doesn’t look at capitalization. If the ADA cryptocurrency increased 100%, the market capitalization would increase by $ 71 billion. If the EGLD gained $ 71 billion, its price would rise by 14 to 80%, almost 15 times.
Therefore, never look at the price of tokens, but the capitalization. Even with Shiba Inu, rumors are spreading that the target for a Shiba token is $ 0.01. In that case, the capitalization of this cryptocurrency would be 3,947 billion, which is 3.7 times more than BTC currently has. Now you understand that it is total nonsense and a trap for newcomers, which unfortunately takes over.