Dogecoin rival Shiba Inu lost a quarter of its value on Thursday as the crypto world was spooked by the ‘whale’ wallets that control the majority of its existing tokens.
While approximately 870,000 wallets hold the dog-themed meme-coin, the top ten own almost 72%, according to Coinmarketcap.com.
The biggest wallet holds a massive 41% – worth over US$20bn at its peak.
One of the ‘whales’ has been moving Shiba coins into other wallets raising concern amongst investors that the holder is considering selling.
“It looks like there were four transactions out of that account [earlier this week], each sending US$695mln of SHIB to a different account – so a total of $2.78bn,” said Tom Robinson, co-founder of blockchain forensics firm Elliptic.
“Whoever it is purchased the SHIB on Uniswap about a year ago, for not very much.”
Shiba is not the first crypto to have raised concerns surrounding high ownership concentration.
Initially, Bitcoin and Ethereum were significantly influenced by whales, but their ownership concentration has since declined as more institutions and retail investors jumped onto crypto.
Between 20 and 50 crypto-trading firms “are pushing most of the volume in crypto,” said Antonio Juliano, founder of DeFi exchange dYdX.
The market capitalisation has plunged from US$51bn last week to US$26bn on Thursday.
Last week, for a brief period, Shiba leapfrogged Dogecoin into the top ten cryptocurrencies in existence, despite the meme-coin having very little economic fundamentals to thrive.
“For crypto with no underlying economics whose value is determined only by speculation – concentrated ownership suggests a rigged game,” said Aaron Brown, a crypto investor who also writes for Bloomberg Opinion.