Shiba Inu Continues Its Rise. Bitcoin and Ethereum Are Still Looking Cheap, Analyst Says.

SHIB has been surging since late September, following its listing on the

Coinbase Global

(ticker: COIN) exchange on Sept. 16.

Coinbase

now accounts for 12% of volume, behind market leader Binance at 32%, for SHIB coins swapped with Tether, a stablecoin (pegged in value to $1).

While SHIB had pulled back from highs in late October, it now appears to be on another run in hopes that Robinhood (HOOD) will list the token. Robinhood already lists Dogecoin along with major cryptocurrencies like

Bitcoin
and

Ethereum.
A petition on Change.org to add SHIB has now gathered 497,000 signatures from the SHIB army, as it is known. Robinhood may also be stoking interest, mentioning SHIB recently in a multiple-choice question about crypto projects on Instagram.

Robinhood, which doesn’t charge upfront trading commissions, has not committed to listing SHIB. “We’re having to carefully evaluate whether we can add new coins in a way that’s safe for customers and in line with regulatory requirements,” the company said on a call with analysts last week.

Robinhood did not immediately respond to a request for comment.

SHIB and Dogecoin are fueled largely by social media. Dogecoin, one of the first meme tokens, started as a joke, and spawned legions of imitators after it unexpectedly took off, thanks in good measure to tweets and other nudges from

Tesla

CEO Elon Musk.

More important, some analysts say that Bitcoin and Ethereum—the two largest cryptos—are still looking cheap based on various measures of value.

Bitcoin, despite a roughly 50% run since late September, still looks cheap compared with traditional equity markets, according to Sean Farrell, head of digital asset strategy at Fundstrat Digital Asset Research.

Farrell uses a version of price-to-book value to compare Bitcoin with stocks. He compares the price of Bitcoin with the cost of mining or processing transactions on the network, based on revenues for miners as a proxy for their hardware and energy costs.

“We’ve seen Bitcoin get into overheated territory and speculative price action,” he told Barron’s. “Based on where the multiple is now, we think there’s room for expansion before we enter that speculative territory.”

Bitcoin’s “price to book” also looks favorable in comparison to sectors in the

S&P 500
with Bitcoin trading around the same multiple as utilities and below sectors like tech and financials, Farrell says.

“If you agree that the price/book ratio for Bitcoin is a valid metric, this creates an apples to apples comparison against equities,” he says.

Ethereum looks cheap on similar measures, he says. And the network has some fundamentals going for it. One is that transaction activity has increased in recent weeks. The supply dynamics look stronger with 750,000 Ethereum tokens “burned,” or taken out of circulation, since early August. That’s when the Ethereum network went through an upgrade that modified the fees paid to miners, with a portion of their base fees being burned—similar to retiring the shares outstanding of a company.

The burning of Ethereum tokens has removed $3.5 billion worth of supply from circulation. And net issuance of Ethereum tokens was negative last week for the first time, creating a deflationary dynamic.

Add it all up and he sees Bitcoin hitting $100,000 by year-end, up from recent prices around $61,000. He expects Ethereum to reach $10,500, from recent prices around $4,490.

“Time in the market is more important than timing with Bitcoin, Ethereum and other crypto assets,” he says. “When they move, they move rapidly and it doesn’t take long for these assets to get legs. The monetary conditions and equity markets speak to conducive conditions for price appreciation in crypto.”

Write to Daren Fonda at daren.fonda@barrons.com