The buzz around Shiba Inu (SHIB) reached a fever pitch during the 2020-2021 crypto bull market, with the meme coin’s price skyrocketing to as high as $0.00008. Euphoria and optimism led to many predicting a SHIB value of $0.001, a milestone that remains elusive today. This report delves into the why.
The Burn Initiative
To push SHIB prices up, the Shiba Inu community initiated a token “burn” in 2022, a strategy involving the transfer of tokens to a “dead address,” effectively removing them from circulation. However, after a year, this effort has had minimal impact on the coin’s value.
According to Shibburn, a tracking site, 410,658,326,324,061 SHIB tokens have been burned, representing a bit over 46% of the maximum total supply of more than 999 trillion tokens. Notably, the community contributes to this figure less than 1%.
Vitalik Buterin’s Significant Role
The bulk of the SHIB tokens burned come from Ethereum founder Vitalik Buterin. The Shiba Inu team had sent half of SHIB’s supply to Buterin, who subsequently donated 50 billion SHIB to an Indian COVID-19 relief fund and burned the rest. His massive transaction accounts for approximately 410 trillion tokens or nearly 100% of the total tokens burned.
A Hindrance to Price Growth
The point of the community burn was to reduce the token supply rapidly, thereby raising the coin’s value compared to its rival, Dogecoin. The reality, however, is that community efforts have barely scratched the surface. For SHIB to realistically hit the $0.001 mark, at least 80% of its supply would need to be burned, which translates into hundreds of trillions of tokens.
The dilemma is that a large portion of SHIB is already in the hands of investors who are unlikely to burn significant portions of their holdings. This means the rapid reduction in circulating supply required for SHIB to hit $0.001 is not feasible.
The Bottom Line
With a current circulating supply of over 579 trillion SHIB tokens—higher than the amount already burned—the likelihood of the meme coin hitting the $0.001 target seems improbable.
The fantasy of SHIB reaching $0.001 is exciting, but the numbers provide a sobering counterpoint. Achieving that valuation would require a change in dynamics far beyond community efforts, challenging the very nature of how cryptocurrencies gain and sustain value.