Here’s a Huge Threat to Shiba Inu and Dogecoin You Might Not Have Seen Coming

What could knock Shiba Inu (CRYPTO:SHIB) and Dogecoin (CRYPTO:DOGE) off their lofty perches? There are a number of threats, of course. I’d rank a prolonged shift to a “risk-off” market as the most likely factor to cause the digital coins to continue sinking.

It’s also quite possible that some of the rising stars of the cryptocurrency world could gain momentum at the expense of Shiba Inu and Dogecoin. For example, Chainlink and Internet Computer racked up gains recently while nearly every other cryptocurrency fell.

But the most worrisome risks are the ones that come as a surprise. Here’s a huge threat to Shiba Inu and Dogecoin that you might not have seen coming.

Welcome to the mainstream, crypto

I won’t try to build the suspense. The risk for Shiba Inu and Dogecoin that many investors might not have thought about is the mainstreaming of cryptocurrency. Just in the past couple of weeks, there have been two glaring examples of this.

First, PayPal Holdings (NASDAQ:PYPL) confirmed on Jan. 7, 2022, that it’s planning to launch a cryptocurrency. The fintech company wants to roll out a stablecoin pegged to the U.S. dollar.

PayPal hasn’t released many details about its digital coin. However, it seems to be a pretty safe bet that the company would allow purchases through its PayPal and Venmo apps with the stablecoin. 

Second, CNBC reported on Jan. 16 that Walmart (NYSE:WMT) is planning to create its own cryptocurrency. The retail giant filed applications with the U.S. Patent and Trademark Office on Dec. 30, 2021, that indicate it wants to compete in the metaverse with its own digital coin and crypto wallet, and sell virtual products as non-fungible tokens (NFTs).

Why it’s a threat to meme coins

Could PayPal and Walmart really cause problems for Shiba Inu and Dogecoin? Actually, yes. And even if these two companies don’t, the efforts of others to bring cryptocurrency into the mainstream could present a significant threat to the two meme coins.

Arguably the most important driver going forward for digital tokens will be their real-world utility. This has been perhaps the greatest knock in the past against Shiba Inu and Dogecoin.

I think that the criticism that these meme coins lack real-world utility doesn’t have as much credibility as it once did. However, the key thing to note is that cryptocurrencies with significantly more real-world utility are likely to outperform those with less real-world utility in the future.

That’s why PayPal’s and Walmart’s efforts could place the prospects of Shiba Inu and Dogecoin in jeopardy. PayPal has the world’s most widely accepted digital wallet with 416 million active accounts, including 33 million merchant accounts. Walmart reigns as the biggest physical retailer globally with a fast-growing e-commerce presence.

Eventually, Shiba Inu and Dogecoin could compete head-to-head with “PayPal Coin” and “Walmart Coin” for users. If millions of people across the world who aren’t into cryptocurrency now choose to go with these familiar alternatives, many of the current favorite meme coins could be in big trouble.

Not a foregone conclusion

Before Shiba Inu and Dogecoin fans fire off angry tweets and emails, let me acknowledge that either or both of these coins could still be successful over the long run. It’s not a foregone conclusion that PayPal, Walmart, or any other mainstream company that decides to offer its own cryptocurrency will prevail.

Probably the best path for Shiba Inu and Dogecoin to succeed over the long term mirrors what companies must do to be successful — differentiate in a significant way. For example, Shiba Inu’s multiplayer game in development could set it apart from rivals.

What if these cryptocurrencies don’t establish compelling competitive advantages? I suspect that it could be a losing battle for them to compete against the real-world utility offered by huge companies such as PayPal and Walmart. Maybe this mainstream threat isn’t a clear and present danger, but it could very well be a future danger.