How Can Burns Help Shiba Inu Hit $0.001?

Shiba Inu has a price goal of $0.001, and some key players have championed burns as a major driving factor; but how efficient are burns in this journey?

Shiba Inu (SHIB) has displayed tremendous momentum over the past week. However, the $0.001 objective remains an ambitious target. Key players have noted token burns as one of the significant factors that could support Shiba Inu, but how effective is this phenomenon for the $0.001 price?

The Shiba Inu Supply Problem

Shiba Inu‘s current circulating supply is a major hindrance to the $0.001 price objective. With a current circulating supply of 579 trillion tokens, SHIB’s market cap would skyrocket to $579 billion if the asset should hit a price of $0.001.

For context, Bitcoin, the world’s largest crypto asset by valuation, has a market cap of $596 billion. Similarly, Ethereum (ETH), which retains a position as the second largest cryptocurrency, currently has a market capitalization of $226 billion.

Consequently, if Shiba Inu hits $0.001 with its current circulating supply, it will eclipse Ethereum’s market cap by two times and rival Bitcoin as the largest crypto asset. This would require an enormous amount of money pumped into SHIB. Such an inflow is not possible in the next few years.

How Effective Are Token Burns?

At its current price of $0.00000760, for Shiba Inu to hit $0.001, it would need to surge by up to 13,000%. For an asset to skyrocket by this much, it would require a significant inflow of funds or a significant amount of burns.

If such a magnitude of inflow does not occur, the community would need to drastically reduce Shiba Inu’s supply to give the asset a chance at the $0.001 price objective. 

This phenomenon occurred two years ago when Ethereum founder Vitalik Buterin incinerated 410 trillion SHIB tokens in May 2021. The burn coincided with an ongoing Shiba Inu rally, leading to the capture of the all-time high of $0.00008845 in October 2021.

A similar 410 trillion burn would reduce SHIB’s circulating supply to 169 trillion. Even at this rate, Shiba Inu’s market cap would amount to $169 billion if the asset reaches a $0.001 price. While this is lower than BTC and ETH, it is still higher than USDT’s market cap of $83.24 billion. This would make SHIB the third largest asset.

In addition, burning 410 trillion tokens is not particularly feasible in the next ten years. Per information from Shibburn, Shiba Inu’s current daily burn rate is 101 million. If this is sustained, it will take over 11 thousand years to incinerate 410 trillion tokens.

Shiba Inu Needs Burns & Utility

While Shibarium and other projects will likely bolster burns, the extent to which they will do this remains to be seen. As a result, Shytoshi Kusama, the community-appointed SHIB lead, has championed the introduction of utility and demand.

Shiba Inu’s goal to hit $0.001 or any substantial price would depend on a combination of burns, utility, and demand. In April, Kusama rightly emphasized that burns alone would not support large price surges for SHIB but a mix of burns and utility. This is the reason behind introducing projects such as Shibarium, Shibacals, and SHIB: The Metaverse.