Shiba Inu and Dogecoin face continued downside as lack of sustainable demand drives 50% further decline, Fool says

Shiba Inu and Dogecoin remain among the most speculative tokens in the cryptocurrency market, and both have fallen sharply from their recent highs. Major cryptocurrencies such as Bitcoin are down by around 40% from their 52-week peak, while Shiba Inu and Dogecoin are down by nearly 70%, reflecting weaker demand and broader investor risk reduction amid economic uncertainty.

Market decline and shrinking crypto valuation

The total value of all cryptocurrencies in circulation peaked at $4.4 trillion in October last year, but has since dropped to $2.4 trillion. The industry faces uncertainty alongside sluggish adoption rates even for some of the largest coins and tokens. At the same time, investors appear to be trimming exposure to riskier assets.

Every major cryptocurrency is lower than its peak, including Bitcoin, which has declined by 43%. However, the smaller end of the market is experiencing the largest drawdowns, with meme coins SHIB and DOGE each down by almost 70% from their 52-week highs.

Cause: speculative demand without durable fundamentals

For meme coins, sustained upside typically requires a consistent source of demand—either from consumers using the token for products and services, or from investors treating it as a legitimate store of value. The article argues that both Shiba Inu and Dogecoin have struggled to establish that kind of durable demand, leaving them vulnerable to continued downside.

Development: Shiba Inu’s relevance fades

Shiba Inu was created in 2020 by an anonymous developer who aimed to offer an alternative to Dogecoin, built on the Ethereum platform to benefit from a large, liquid, and secure network.

In 2021, Shiba Inu delivered a return of 45,278,000%, which would have turned a $3 investment into over $1 million. But the rally was driven entirely by speculation, and the token has since lost momentum. The article notes Shiba Inu is down almost 70% from its 52-week high and down 93% from its 2021 peak.

According to the article, Shiba Inu has not developed a reliable consumer use case, and it is also difficult to find investors who view it as a store of value given the magnitude of its decline.

Development: Dogecoin’s supply dynamics and demand challenge

Dogecoin was created in 2013 by two friends who said the cryptocurrency was intended as a joke, at a time when Bitcoin was rapidly gaining attention. The article highlights that Dogecoin later attracted broader attention in 2019 when prominent figures such as Elon Musk discussed it publicly, including through social media engagement and meme-related posts.

By 2021, Dogecoin had reached a market capitalization of over $90 billion, becoming one of the largest cryptocurrencies and valued above most companies in the S&P 500. As with Shiba Inu, the article characterizes Dogecoin’s upside as largely speculation-driven.

The article also points to a supply issue. Only 5 billion coins can be mined each year, while 153.7 billion coins are currently in circulation. It estimates that supply will roughly double over the next three decades, implying that the value of each coin would need to halve over the same period to maintain a constant market cap—unless demand grows enough to offset the increased supply. The article argues that Dogecoin’s main use case is tied to meme culture, which makes it difficult to find a sustainable demand source capable of supporting real value.

Impact and outlook

The article concludes that the lack of a sustainable source of demand is likely to keep pressure on both Shiba Inu and Dogecoin over the long term. It states that it expects both meme coins to sink by a further 50% (or more) from their current levels over the long term.