Shiba Inu would need to surge by up to 1,000x to hit the $0.01 price target.
Shiba Inu (SHIB) took the crypto scene by storm in early 2021, barely a year after its launch. SHIB rallied at an unprecedented pace, making millionaires out of investors. While its period of astronomical surges has stopped, proponents are hopeful of another rally to $0.01. But is this feasible or just an improbable dream?
To hit a price of $0.01 (or 1 cent), SHIB has to increase by 10,000% or 1,000x its current price of $0.00001059. This would mean deleting three zeros. But this would not be the first time the fast-growing asset has deleted that many zeros from its price. SHIB rallied from a price of $0.00000002 on May 7, 2021, to its all-time high of $0.00007489 on October 30 of that year.
This marked a massive 374,349% increase, or 3,743x, in five months. For context, this astronomical surge turned a $100 investment into $374,300 in just five months. SHIB was able to take off up to three zeros from its value.
Shiba Inu Extensive Supply and the Importance of Burns
One would think a 1,000x rally would be an easy feat for SHIB since it was able to increase by 3,743x in five months back in 2021, but that’s not the case. The asset’s extensive supply hinders more rallies like the previous one.
SHIB is currently trading for $0.00001059. At its current circulating supply of 589 trillion tokens, if SHIB were to increase by 1,000x to a value of $0.01059 per coin, its market capitalization would soar from the current $6.24 billion to $6.2 trillion. Notably, Bitcoin, the largest crypto asset, has a market cap of $545 billion, and the entire crypto market currently has a combined market cap of $1.18 trillion.
Increasing to a market capitalization of $6.24 trillion is an improbable target. This is why burns are essential to bolster the asset’s price action. A 1,000x surge will not amount to a $6.2 trillion market cap if the SHIB supply is drastically reduced.
The 3,743x surge in 2021 was majorly triggered by Ethereum founder Vitalik Buterin’s burn of the 410 trillion SHIB tokens gifted to him. The burn occurred on May 16, 2021, supporting SHIB’s price action to the ATH in October 2021.
Burning an additional 410 trillion tokens remains a wild dream at the time due to the current Shiba Inu burn rate. Koyo Token’s latest burn of 1.49 billion tokens is the largest single burn witnessed in a long while. However, even if the community burns 1.49 billion tokens daily, it would take 275,167 (approximately 754 years) to burn 410 trillion tokens.
Shibarium and the Promise of Utility
While periodic burns are important, the community might not need to rely on burns alone to bolster the asset’s price. The large utility is crucial in supporting the asset, triggering demand and adoption. Despite starting as a meme coin with a little use case, Shiba Inu wants to transcend the “meme coin” tag by introducing more utility.
The project aims to do this through several initiatives, including Shiba Eternity, ShibaSwap, SHIB: The Metaverse, and the much-hyped Shibarium L2 network. Once all these are in full operation, they could introduce more utility to the asset, bolstering its adoption. Shibarium will also contribute to token burns by incinerating SHIB with 70% of its base transaction fees.
Conclusively, a realistic look at the situation suggests that a surge to $0.01 is an unimaginable target in the next few years, but nothing is impossible in the crypto scene. However, Shiba Inu could inch closer to this price target through improved token burns and extensive utility in the coming years. Community efforts have been spectacular in this regard.
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Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.