Crypto traders take riskier bets, sending Dogecoin and Shiba Inu soaring

Popular meme-based tokens, Dogecoin (DOGE) and Shiba Inu (SHIB), experienced a notable surge of around 9% within the last 24 hours. This uptick is intriguing for market watchers, as it hints that crypto traders might be pursuing higher-risk bets, inspired by Bitcoin (BTC) commendable market performance.

The spontaneous boost in SHIB and DOGE’s value came after the social media giant, platform X (previously known as Twitter), announced the introduction of a video calling feature exclusive to premium users.

Despite the absence of any direct links between this feature and the meme coins, traders appear to display a classic case of “irrational exuberance.”

Historically, there have been expectations among some sections of the crypto community that platform X might adopt DOGE as a payment alternative.

As a testament to the rising interest, the cumulative trading volumes for these tokens skyrocketed to a whopping $1.2 billion on Thursday, up from $350 million the previous Monday, according to CoinGecko.

Furthermore, the open interest in futures for both DOGE and SHIB has witnessed a sharp rise of over 50%. This suggests that traders anticipate increased price swings in the immediate future.

While the meme tokens did see an appreciable growth, it pales in comparison to the recent surges in other major cryptocurrencies. A potential spot bitcoin exchange-traded fund (ETF) catalyzed a 30% rise in bitcoin prices in the past week, though it later pulled back. Other major players like ether (ETH), solana (SOL), and xrp (XRP) reported gains as high as 40%.

Despite DOGE and SHIB’s 15% growth in the same timeframe, they lagged behind other leading tokens. Interestingly, historical data reveals a pattern where spikes in these meme tokens precede a dip in major cryptocurrencies.

Blockchain analytics firm, Santiment, remarked in a December report, “Every time that the price of DOGE starts rising rapidly, there’s a market-wide crash following just moments later.”