Investors who own large amounts of a cryptocurrency are known as crypto whales. It is not surprising that there are many Ethereum (CRYPTO: ETH) whales as Ethereum is the second largest cryptocurrency by market cap.
What might be surprising, though, is that Ethereum's whales are buying another cryptocurrency. Many of the top 1.000 Ethereum holders have grabbed Shiba Inu (CRYPTO: SHIB), according to whale tracking website WhaleStats. But why? Here are three likely reasons.
1. A more attractive price
The most obvious explanation of why Ethereum whales are buying Shiba Inu is that the digital currency has a quotation much more attractive than she has had in quite some time. Shiba Inu has plummeted by more than 70% in the past three months. The last time the Shiba Inu was close to its current price was in early October 2021.
Of course, Ethereum also dropped a bit. However, the nearly 40% decline for cryptocurrency over the past three months isn't as steep as Shiba Inu's fall.
This isn't the first time an Ethereum whale owns a lot of Shiba Inu. In October, an Ethereum whale bought 277 billion SHIB coins. Additionally, Shiba Inu's largest position is in a dead wallet created by Vitalik Butarin, the co-founder of Ethereum.
2. Expectation of wider adoption
Deep-pocketed investors wouldn't be interested in Shiba Inu, though, if they didn't think the cryptocurrency is set to rise significantly in the future. A probable reason for optimism on this front is the expectation that the Shiba Inu may be more widely adopted in the future.
But is this expectation realistic? There is a good argument for it.
For one thing, Robinhood may choose to list the digital token on its trading platform. Sure, Robinhood executives have publicly downplayed the urgency to support more cryptocurrencies. However, it wouldn't be surprising if Shiba Inu were added to the popular trading platform in 2022.
Furthermore, the planned launch of the Shibarium layer-2 solution could trigger a wider adoption of Shiba Inu. With Shibarium, the transaction fees for Shiba Inu are expected to be much lower than they are currently. The exact launch date of Shibarium is not known at this point, but it could happen by the middle of this year.
3. Opportunity of the Metaverse
Ethereum whales may also be bullish on the Shiba Inu metaverse desirability. So far, Shiba Inu has been missing out on the recent frenzied investment in game coins. While the meme coin may be late to the party, the game looks set to be a key part of its future.
Shiba Inu Games has hired longtime game developer William Volk to lead the charge in developing a multi-player game. It also brought an AAA studio (i.e., one that developed multi-million dollar games) on board for the effort - Playside Studios. Playside has more than 50 games to its credit, including games for Disney, Nickelodeon, and Warner Bros.
The developers recently provided a preview of the Shiba Inu metaverse that has been developed. It is called "Shiberse", but in the past it was also called "Oshiverse".