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Daily Mirror
Daily Mirror
Business
Sam Barker

What is Shiba Inu? Newcomer cryptocurrency once dismissed as a joke explained

The price of cryptocurrency Shiba has hit a record high after tripling since Sunday - despite being dismissed as a joke by many.

The coin has risen from £0.0000020 on Sunday to a record peak of £0.000065 today, according to cryptocurrency website Coinbase. The cryptocurrency is now worth around £27.8billion in total.

But what is Shiba Inu, and what is the reason for its rapid rise?

The cryptocurrency started as a humorous nod to the cute Shiba Inu dog breed, which in turn led to the 'Doge' internet meme.

This meme led to the creation of another jokey cryptocurrency, Dogecoin - and the Shiba Inu cryptocurrency is also a reaction to that.

The new cryptocurrency was launched just last August by a creator known only as Ryoshi - based in China.

The Shiba Inu cryptocurrency has been boosted in the past by billionaire Tesla boss Elon Musk - who is also a crypto fan.

Earlier this month Musk tweeted a photo of his Shiba Inu puppy, which started the ball rolling with a rise in the price of the currency.

Is the price of Shiba Inu going to keep rising - or is it a flash in the pan? Let us know in the comments below

Much of the current rise in Shiba Inu is due to speculation it could soon be listed on trading platform Robinhood.

A Dogecoin - featuring the meme that inspired it (NurPhoto via Getty Images)

Where can I get Shiba Inu?

You can buy Shiba Inu on cryptocurrency trading platforms like eToro, Binance and Coinbase - though Binance is not available in the UK.

What are the risks of investing in cryptocurrencies?

Cryptocurrency is not regulated in the UK, unlike most other financial products.

The Financial Conduct Authority (FCA) watchdog does monitor crypto, but only to prevent money laundering or funding terrorism.

That means if you put money into anything to do with crypto and lose it you will probably never see it again.

Many other financial deals are regulated by the FCA, meaning your money is protected up to £85,000 if the company goes bust or your money is stolen somehow.

The Shiba Inu cryptocurrency was only set up last year (Getty Images)

This is thanks to the Financial Services Compensation Scheme (FSCS), a fund financial firms pay in to.

You can check on the FCA or FSCS websites to see if a company you are interested in is regulated and safe to deal with.

What makes cryptocurrencies rise and fall?

Digital currencies can easily rise or fall by 3-4% in a normal day.

Traditional investors would look at this sort of daily rise with complete shock.

Investors used to major financial indices, like the FTSE 100, are accustomed to them moving by less than 1% a day. So what makes cryptocurrency so volatile?

The answer is: almost anything, from financial regulation to tweets from Elon Musk.

In August, the price of Bitcoin, the biggest cryptocurrency, rose because of news that Google will allow cryptocurrency adverts.

Because Bitcoin is so dominant, what happens with its price tends to be mirrored by its smaller rivals.

Other common reasons for cryptocurrency prices rising are because of tweets from famous investors such as Elon Musk.

Earlier this year Musk put the word 'Bitcoin' in his Twitter biography and the price of the currency rose by 20%.

But the price of cryptocurrencies can fall just as easily as they rise.

In July cryptocurrency prices took a dive because regulators around the world started getting tough on the digital currencies.

China in particular launched a major attack on cryptocurrencies, with vice-premier Liu Hu saying the country would "crack down on bitcoin mining and trading" .

The country's central bank put out a statement saying no Chinese financial companies should have anything to do with cryptocurrencies.

Also in July, the UK's Financial Conduct Authority (FCA) watchdog banned the world's biggest cryptocurrency exchange , Binance.

The price of the digital coins also rise and fall due to social media trends and the news.

Bitcoin's popularity spawned many imitators, and there are now more than 4,000 digital coin alternatives.

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