The current geopolitical landscape is creating conditions that potentially signal heightened market turbulence. During such periods, holding speculative digital assets like meme cryptocurrencies often entails considerable risk. Two such tokens, Dogecoin (DOGE) and Shiba Inu (SHIB), while popular for entertainment among casual holders, present significant vulnerabilities for those holding sizable investments.
First, Dogecoin’s fundamental supply dynamics fundamentally undermine its attractiveness as a long-term store of value. Unlike many cryptocurrencies with capped total supplies, Dogecoin has no maximum limit on its issuance. New coins continuously flood the market, diluting existing holders’ stakes. This constant increase in the circulating supply requires sustained and growing demand to absorb new tokens without triggering price declines.
However, Dogecoin currently lacks a substantive use case to anchor or stimulate such demand organically. The absence of practical utility severely limits investor incentives to purchase or hold the coin beyond speculative interest. In a scenario where overall market confidence weakens—often a byproduct of geopolitical challenges that prompt capital flight from riskier assets—the demand necessary to offset dilution is unlikely to materialize. Consequently, Dogecoin holders may find their investment exposure subject to sharp value contractions.
Similarly, Shiba Inu faces its own set of structural and economic challenges that raise cautionary flags. Unlike Dogecoin, Shiba Inu has implemented supply control efforts through token "burning," an intentional removal of tokens from circulation to reduce supply and theoretically support price appreciation. Additionally, Shiba Inu's ecosystem includes the development of a dedicated layer-2 blockchain called Shibarium, designed to foster decentralized applications (dApps) and grow usage.
Despite these mechanisms, the efficacy of burns depends heavily on continued demand for purchasing tokens to be destroyed. Without regular, organic transactions or automated mechanisms actively consuming tokens, this process cannot reliably limit supply expansion over time. The practical utility of Shibarium remains minimal at present, as evidenced by a negligible $2 revenue reported on-chain on January 20. Such low usage undermines prospects for consistent ecosystem-driven demand growth.
These considerations underscore the precarious position of holding either Dogecoin or Shiba Inu, particularly for investors with material capital allocations in these assets. During periods marked by economic and geopolitical uncertainty, investors typically gravitate toward assets perceived as stable or less volatile. The inherent characteristics of these meme coins—unrestricted supply additions in Dogecoin’s case, and nascent ecosystem engagement coupled with demand-dependent inflation control in Shiba Inu’s case—exacerbate risk exposure.
Therefore, it is advisable for investors to carefully assess their holdings in these tokens against the backdrop of an increasingly uncertain global environment. The evidence suggests that maintaining significant positions in Dogecoin and Shiba Inu may not align with prudent risk management strategies. Selling such positions may mitigate potential downside and preserve capital amid forthcoming market volatility.