What happened
Superstar meme token Shiba Inu (SHIB 1.54%) is down 7.5% as of 9:30 a.m. ET, continuing the rather impressive decline from this token's late-October peak. Since its peak, Shiba Inu has lost well over 60% of its value -- over the past month alone, this token has lost nearly 40% as the rout continues.
Today's move in Shiba Inu comes alongside a continued plunge in the crypto market. Today, the total market capitalization of all cryptocurrencies has sunk by 6%, signaling a market-based move lower. As a higher-volatility token, it's perhaps unsurprising to see Shiba Inu's losses extend past those of the market.
Image source: Getty Images.
So what
Market-specific factors don't appear to be in favor of crypto investors today. Investors appear to be digesting overseas news that has materialized over the past few days, which has sent the crypto market lower.
In China, a Beijing court officially ruled that a Bitcoin mining contract was void, furthering the Chinese Communist Party's stance that cryptocurrencies and crypto mining are not in the country's best interests. Furthermore, we've seen recent news that the Russian central bank is seeking to ban crypto investing altogether in a similar move to that of China. This increasingly bearish stance by large Asian economies has spurred some concern among crypto aficionados with respect to how capital flows into this sector will be impacted.
Furthermore, choreographed central bank tightening in the U.S., and actual rate hikes out of the U.K., signal what could be the end of easy money policies. Inflation is running rampant, and a crackdown on the amount of cheap money floating around the global ecosystem could stymie the growth of more speculative assets as investors seek higher returns in safe havens.
Now what
For momentum-based and sentiment-driven tokens like Shiba Inu, these macro factors appear to be taking a big toll. Perhaps rightfully so. Speculative assets such as meme tokens have seen some gravity-defying moves this year. If anything, a well-deserved breather is in order.
Shiba Inu is still up more than 40 million percent since the beginning of the year. It's a token that's already gone to the moon. Whether it will round-trip back to earth or continue deeper into orbit is unknown.
However, for now, it appears market sentiment is leaning toward a risk-off approach to such assets.
