Every crypto bull market tries to borrow a little magic from the last one, particularly when it comes to the most popular meme coins like Dogecoin (DOGE 9.47%) and its younger cousin Shiba Inu (SHIB 6.19%). But sometimes, the blueprint for success changes, like it is right now.
And in the new regime, Dogecoin has the clearer path to outperform Shiba Inu from here, even if it doesn't warrant being one of your core holdings. Let's dive in and explore why.
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Dogecoin just added real on-ramps and is flirting with building new capabilities
The first big shift that's powering Dogecoin beyond Shiba Inu is investor access.
On that front, the REX-Osprey Doge ETF, an exchange-traded fund that gives investors exposure to the meme coin, began trading on Sept. 18, with strong volume suggesting plenty of demand. ETFs hold assets and trade on an exchange like a stock, which means that those with brokerage accounts and retirement accounts can buy shares, so there's now a large new population of investors (and their capital) who can buy Dogecoin. Other Dogecoin ETFs are also under consideration, and could potentially be approved as soon as next month.
Another factor is that corporate treasuries as well as dedicated crypto treasury companies are accumulating Dogecoin. In September, a business called CleanCore disclosed it held 600 million coins in its treasury program, with multiple purchases and a strategy to hold the crypto as a primary reserve asset; its goal is to eventually accumulate 5% of the entire circulating supply. It isn't the only big buyer, and others could come forward soon, provided that the market remains hot.
The final new thing is that for the first time in a long time, developers are seriously discussing making upgrades to Dogecoin and pushing the protocol forward. One proposal, to add native verification of zero-knowledge (ZK) cryptographic proofs, would enable the launch of new Layer-2 (L2) chains and smart contract-style decentralized applications (dApps). Those changes would mark a major technical advancement for the chain, and thereby create the possibility of regularly burning tokens as part of users' usage fees, which would grant the coin its first value-generating mechanism ever. Such an addition would be a boon for the very sparse investment thesis for buying Dogecoin, though it's important to note there's a long distance between these proposals and effective implementation that creates favorable new economics for holders.
Put together, Dogecoin now has some distribution within financial institutions, early signs of balance sheet adoption, and a plausible path to expand functionality to generate more value. It hasn't ever experienced any of these three tailwinds before, and all three could potentially deliver long-term growth.
Shiba Inu's expansion plans have not played out
Much like Dogecoin, Shiba Inu's core advantage is community energy. That's how it went to the moon in 2021, and that's what allows it to have a market cap of about $7.1 billion today.
But the institutional pathways that just opened for Dogecoin have not opened for Shiba Inu in the same way, and they might not ever. There is no approved Shiba Inu ETF in the U.S, though that might eventually change. Nor are there any Shiba Inu digital asset treasury companies, nor any disclosed corporate accumulators.
On the fundamentals, Shiba Inu's L2 network, the Shibarium, was launched to lower costs and add utility -- which is to say, it already made an attempt at what Dogecoin is now considering trying. In practice, the Shibarium is barely used, and it doesn't have a clear purpose or much of any demonstrated utility. Nor do its economics have a clear way of adding value to the main chain and thus boosting the native token's price.
So Dogecoin has at least three clear advantages that should -- in theory -- power its outperformance over Shiba Inu. Assuming Dogecoin's new ETF channel brings steady capital inflows and a few more companies try the treasury approach, it's hard to see how Shiba Inu, with none of the above, could possible one-up it.
On the other hand, buyers should be clear-eyed. Neither of these assets have cash flows or demonstrated utility, and sentiment, while favorable at the moment for Dogecoin in particular, can and will cut both ways eventually. You shouldn't be buying either of these cryptocurrencies.
For now, watch the capital flows, watch what the developers are actually working on, and wait for real utility to show up in the data before even considering committing any capital. Dogecoin's next act is starting, and in due time, it might yet turn its silly brand into something valuable.
