How Shibtoshi gambled 37 ETH and became a Shiba Inu billionaire

Shiba Inu whale Shibtoshi often works through the night, before crashing and sleeping during the day. Little is known of this enigmatic character, who wears a gold-themed mask when in public and is surrounded by a security detail.

When he’s not trading or building, Shibtoshi enjoys hunting and shooting. He posts different videos on X of him shooting machine guns and firing weapons from tanks. That is just what he likes to do to decompress. 

He amassed a position in Shiba Inu worth north of $5 billion at times with just 37 ETH — not bad for a man who does not call himself a trader and has never played with stocks and shares. For him, it is pure crypto, and he learned to approach the memecoin casino with a gambler’s mindset and lots of trial and practice. 

"The gains are potentially better in crypto even if they are more volatile. I have a gambling background, so I lean into crypto, especially when perpetuals came into existence. It scratched my itch for gambling while at the same time provided me with passive income. Having said that, I’ve had my ass handed to me on many occasions."

Perpetual futures are derivative contracts without an expiry date, allowing traders to speculate on the underlying asset prices indefinitely.

The SquidGrow CEO has now branched out from gambling on meme tokens into crypto utility platforms. He is focused on building, most notably a product called SilentSwap.

“I continue to seek out like-minded individuals in the crypto space to help further develop useful applications for the masses,” he tells Magazine. “If there’s a void in the space in a particular area, how do you fill that void? You build it that way.”

Shibtoshi, Secret Network and SilentSwap

Shibtoshi attends many conferences and has been the main sponsor for a number of DeCC Days across the world this year. DeCC stands for “decentralized confidential computing” and was coined by a group of privacy-preserving companies attending ETHDenver back in February. 

DeCC encompasses multiple types of encryption technologies and solutions aimed at improved data protection, secure and confidential calculations, and verifiable computing. They include using trusted execution environments, zero-knowledge proofs, multiparty computation and fully homomorphic encryption.

Shibtoshi is building SilentSwap on the privacy-focused, proof-of-stake Secret Network, which offers programmable privacy and encrypted transactions. He is gracious in his interviews but guarded in his answers when it comes to personal details, as he has no wish to be identified in real life.

Who is Shibtoshi? What is his background?

However, Shibtoshi does share some background with a bit of prodding, telling Magazine about his first encounter with Bitcoin in 2011. 

He had previously heard of crypto in 2010 but was not terribly interested. It took a poker game in Las Vegas the following year to jump-start his interest after a poker buddy arranged a $30,000 OTC deal on Bitcoin to get him into a game.

"I was wiped out in that game, but I was also hooked. I went home, and I read the Bitcoin white paper, and I liked it. It really intrigued me that no one could come and freeze my assets like a bank could."

Shibtoshi got into buying and selling Bitcoin using LocalBitcoins and Paxful. He’d meet people in cafes, sometimes receiving magazines filled with hundred dollar notes, or get bank deposits. Finally, he discovered a regular OTC Bitcoin guy who’d buy large amounts at a discount and sell them to him… until his next pivot into meme whale. At that point, he no longer had to rely on strangers and the potential dangers that dealing with cash entailed.

Shibtoshi says he missed the whole ICO craze. However, he did get in very early on the Shiba Inu memecoin. On Aug. 1, 2020, he got a text from a friend within five hours of the launch and started dollar-cost averaging in using 37 ETH. Historical data suggests this was worth around $345 each at the time, or around $12,765 in total. Over the course of a couple of days, he accumulated 104 trillion tokens, which ended up being worth more than $5.7 billion. In theory.

"Of course, that is not real money, as it lacked liquidity. I was not going to be able to offload that all in one go without crashing the entire ecosystem."

Shibtoshi has still managed to pull out significant money by playing it cool and seizing opportunities. As he explains, if there is $100 million in volume in a single day and a trader sells into that, the price isn’t particularly affected.

“Same as other large memecoins, you need to be patient to extract value. Traders understand that if you sell into volume, you can get money out. Basically, you do smaller amounts, and don’t nuke the chart by just doing a big sale.”

He has other handy tips for traders without billions in memecoins to sell, too.

For example, he suggests trading Ethereum Classic, which he says follows ETH prices but with a delay, allowing traders to benefit from up and down movements. Or to follow the Chinese markets and use their influence to make better trading decisions.

“Traders are always trying to catch it at the bottom and flip it at the top, but it can ping-pong a lot. Or you could just roll the dice.”

From playing markets to creating markets

Shibtoshi is now focused on being an entrepreneur. In 2021, his friends suggested he branch out from trading coins. 

“During this time, they jokingly suggested I launch my own project. Initially uninterested, I eventually warmed up to the idea. I took a six-week Solidity course to familiarize myself with coding smart contracts. Encouraged by my friends, I decided to launch a project that would provide a safe environment for my friends and my family, eventually expanding to my community.”

Being self-taught is obviously a challenge Shibtoshi relishes. He began with a meme project in June 2022 called SquidGrow, which was stealth-launched with a $25,000 market cap on BNB Smart Chain. 

“We rapidly grew, achieving a 2,000x increase to a market cap of around $52 million within a few months and eventually going multichain to Ethereum. Although we started as a meme token, we aimed to build a self-sustaining ecosystem fueled by revenue generated on our utility platforms and evolved into a meme utility token. Throughout the bear market, we focused on building utilities in preparation for the next bull market.”

He is at pains to point out the utilities have undergone 18 separate security audits by CertiK and two by Hacken. 

“As an avid and active supporter of cryptocurrency, my goal is to provide valuable utilities to benefit the space. In our short two-year existence, we have achieved many milestones. The community is my proudest achievement, as I believe a strong foundation is crucial for any project’s success.”

Building the community has called for a lot of hand-holding, and Shibtoshi is a big believer in allowing anyone in the community to access him or the other team members directly.

"Trust has to be earned and never given."

SquidGrow’s name is derived from Squid Games, the popular fictional Korean game show on Netflix, combined with hype from EverGrow, a project well-known to him.

Shibtoshi admits he’s not very good at coding

At this stage of the interview, Shibtoshi admits he is an awful coder. It took him six months to code the first smart contract, which was verified in time for the launch date. However, an error in the code meant that although tokens could be bought, they could not be sold.

“It was an accidental honeypot. So, we told our community of 88 people that we had to pause and relaunch, which we did the very next day.”

When asked if he codes anymore, Shibtoshi admits he does do smaller jobs but has learned to hire more experienced people than him to do most of the critical coding.

“I come from an investment background, but learning how to code, even badly, gives me an appreciation for the team and the work they do.”

While leveraging off the memecoin craze, Shibtoshi wants SquidGrow to become a self-sustaining ecosystem.

To date, there are several utilities, including Inkubate, an NFT marketplace; SGS Trade, a DEX; and Knox Locker, a liquidity locker and vesting platform. The one he’s most enthusiastic about right now is SilentSwap, a privacy crosschain aggregator that is decentralized and non-custodial, enabling private asset transfers.

Shibtoshi has been bankrolling the project. Fees on transactions in the app go directly to liquidity, allowing him to maintain liquidity-to-market-cap ratios. It has yet to see major success, he suggests. 

“In my opinion, most startups are not profitable for the first couple of years. We are building our backbone for the longer term.”

Shibtoshi will not be pushed on the amount he has invested, but he does say that security audits alone have cost in the region of $600,000.

His financial advisers might not be so pleased, but the fact it’s still alive is encouraging, given that 72% of crypto projects launched during the 2000–2001 bull run have since died, according to a report published by AlphaQuest. Of the over 12,000 projects investigated, 8,854 were found to be defunct.

Shibtoshi has attracted some big names to the project, including Wendy O, who is an adviser working closely with the team.

He also has a unique approach to taxes, having paid, as he says, his fair share over the years. Nowadays, he uses collateralized loans to offset liabilities because borrowing against your own stack isn’t taxed, while selling coins is.

He has found a bank that accepts Ether and Bitcoin. He gives them a million dollars in crypto, and they give him a loan. After he’s made the repayments, he gets to keep $750,000. Essentially, he is losing 25%, but given the tax bracket he would fall into, the savings are vast. This is how he avoids the larger capital gains taxes — and, incidentally, why governments keep coming up with unpopular proposals to tax unrealized gains on super-wealthy people.

Generally bullish on US policy post-election

Shibtoshi is bullish on US politics following Donald Trump’s election as president. He foresees the US recovering its position as a leader in the global crypto landscape.

He welcomes the beginnings of clear, consistent, fair regulatory guidelines for cryptocurrency and blockchain technology. This includes defining what constitutes a security, commodity and utility token, and establishing rules that protect consumers without stifling innovation.

Shibtoshi believes that to encourage innovation, the US should implement policies that support blockchain development, such as offering tax incentives for crypto-related startups and creating sandboxes for testing new technologies. 

“This approach would help attract talent and investment, making the US a hub for blockchain innovation. By promoting a competitive environment, the US can regain its status as a leader in the digital asset space,” he says.