Indian crypto exchange WazirX recently published its proof of reserves (PoR) statement, that shows its customers’ cryptocurrency holdings and their respective storage locations. The exhibit revealed that the company, which serves over 15 million customers, had listed a meme-inspired crypto as its top token.
(For insights on emerging themes at the intersection of technology, business, and policy, subscribe to our tech newsletter Today’s Cache.)
WazirX’s top crypto holding, according to its PoR posting, was Shiba Inu [SHIB], a whimsical dog-themed token that was the fifteenth biggest crypto by market cap as of January 17. While the exact values change daily, WazirX’s SHIB holdings on behalf of customers made up slightly more than 19% of its total, and came in at around $63,804,084 on the same day. Meanwhile, the exchange’s Bitcoin holdings totalled less than half of that, at roughly $28,366,065.
By proportion, WazirX’s top crypto holdings for its customers were Shiba Inu [SHIB], Bitcoin [BTC], Ethereum [ETH], Dogecoin [DOGE], and Polygon [MATIC]. Two of these crypto assets – Shiba Inu and Dogecoin – are meme coins based on the fluffy-tailed Shiba Inu dog that is popular in Japan (and internet memes).
While the idea of investing real money in such playful assets might horrify most people, crypto investors have their own line of reasoning.
“Shibu Inu and Dogecoin are pretty close to the hearts of a lot of Indians, which is proven in our reserves,” Rajagopal Menon, Vice President at WazirX, told The Hindu about the exchange’s PoR.
Mr. Menon also pointed out that unlike Bitcoin (with 1 BTC worth over $21,000 on January 17), cryptocurrencies like Shiba Inu have a smaller “ticket size.” In other words, customers get more whole tokens in exchange for their investments. (1 SHIB was trading at around $0.00001049 on January 17.)
“Shiba Inu is at a relatively small ticket size so customers prefer that to get into crypto, so that they get a feel of crypto and get a sense of their first ownership of crypto, which is not a very substantial investment,” he explained.
Meme-based cryptocurrencies came to the fore in 2013 with Dogecoin [DOGE]. While many crypto founders assign specific use cases or lofty ideals to their creations, Dogecoin had only one job: to be a joke.
Yet, its popularity exploded as celebrities like billionaire Elon Musk played up the coin on social media. Tesla began accepting Dogecoin for select purchases a year ago, and Mr. Musk publicly supported Dogecoin users when they faced problems withdrawing their assets from the Binance exchange. When Mr. Musk took over Twitter in a $44 billion deal in late 2022, the price of DOGE shot up by more than 20%.
“Within the meme coin universe, whatever Mr. Musk says has a lot of effect on the prices of Doge and Shiba Inu and other meme coins,” Mr. Menon said, adding that Bitcoin was typically the “mover” and “shaker” in the crypto sector.
Shiba Inu is a younger meme token or joke token that was meant to rival the larger Dogecoin cryptocurrency. It was launched in 2020, and soon attracted Indian crypto investors. Mr. Menon noted that many Indian crypto investors often look to try out something new. Shibu Inu offered just that.
Speaking about the mindset of Shiba Inu buyers, Mr. Menon said that they were investing with a long-term approach in mind.
“So we [the Shiba Inu investors] buy small units, small ticket sizes of small units, and it hopefully follows the trajectory of Bitcoin and Ethereum and does wonders in the long run,” he said.
The Indian crypto community also has an emotional connection with the Shiba Inu token. In May 2021, during the height of the COVID-19 pandemic in the country, Ethereum founder Vitalik Buterin donated around $1 billion worth of Shiba Inu tokens to a COVID-19 relief fund for India. While this was a generous amount, the asset’s value fluctuates wildly even today.
Mr. Menon suggested that when people were confined to their homes at that time, the $1 billion donation enjoyed a lot of media attention and provoked people to learn more about Shiba Inu and the Indian crypto community.
But people’s fascination with the dog-themed meme token was far more than just a hype-filled phase. Two years on, interest in Shiba Inu is still strong, and WazirX’s PoR shows the emotional side of crypto investors in India.