Investors were too pessimistic about cryptos to get enthusiastic about the meme coin.
Shiba Inu (SHIB -5.08%) was not anyone’s idea of a pet investment on the second trading day of the week. In the late afternoon, the meme coin had fallen by nearly 5% in value over the preceding 24 hours. Its paws couldn’t work fast enough to outrun the widespread decline in all types of cryptocurrencies, on the back of growing worries about politics and the effect of these on the economy.
A bearish day for cryptos
Tuesday was a trading day to forget for Bitcoin, which sagged due to those concerns, but also because investors took profits at (or near) the peak of the latest crypto rally. Many altcoins followed suit.
Image source: Getty Images.
Fears are growing these days that the federal government shutdown won’t be resolved anytime soon, as both Democrat and Republican lawmakers seem to be locked in a stalemate over the matter. President Trump, meanwhile, indicated only vaguely that he was willing to negotiate over federal support for healthcare insurance, a key sticking point in the dispute.
The government isn’t only the entity that maintains our highways and enforces many of our laws; it’s also an important contributor to the national economy. With much of its activity as a standstill, no doubt this will have a deleterious effect on not only the domestic, but the international economy.
Exposed and vulnerable
Although cryptocurrencies are seen by some to be hedges against such volatility, they are susceptible to its effects. By habit, investors usually retreat into assets considered safer than up-and-down plays like cryptos.
Shiba Inu, by its nature as a meme coin, is seen as high on the volatility scale, even within the crypto world. It’s little wonder it was declining more steeply than Bitcoin.
