The cryptocurrency market has begun to thaw after a deep freeze throughout 2022. The combined value of all cryptocurrencies in existence has risen 27.5% in 2023 so far, which is a better return than all of the U.S. stock market indexes.
But meme token Shiba Inu (CRYPTO: SHIB) has climbed more than double that, with a year-to-date gain of 57%. That pales in comparison to its history-making 2021 return of 43,800,000%, which made millionaires out of investors for just a few dollars if they timed the run perfectly.
With renewed optimism creeping into the crypto sector this year, Shiba Inu enthusiasts might be wondering if history is set to repeat itself. Could it stage another record-breaking run? Is a price of $1 within the realm of possibility?
Shiba Inu developers are preparing for a new growth phase
The Shiba Inu ecosystem is plagued with challenges, with a sheer lack of adoption among the most significant, making the token a mere vehicle for speculation. A cryptocurrency that fluctuates so significantly in value simply isn’t attractive to businesses because it makes managing cash flow impossible. And from an individual investor’s perspective, nobody wants to hold a currency that could collapse in value at any time.
The proof is in the pudding: Just 723 merchants around the globe accept Shiba Inu as payment for goods and services.
The community is banding together to solve that issue. Enthusiasts are eagerly awaiting the release of Shibarium, a layer-2 blockchain solution that will shrink transaction costs and make the process more efficient. Logic suggests this upgrade will make Shiba Inu more attractive as a currency, but it doesn’t necessarily solve its susceptibility to price swings, so only time will tell.
Developers are also stringing together new uses for it, including an upcoming virtual world (metaverse). Users will be able to buy plots of virtual land using Ethereum tokens, and then rename those plots by paying a fee in Shiba Inu.
But could those catalysts send Shiba Inu soaring?
Here’s why 589.6 trillion is the key number
That’s the number of Shiba Inu tokens in supply right now. The problem is in the math, and it’s quite simple: At the current price of $0.000012 per token, multiplied by 589.6 trillion tokens in supply, Shiba Inu has a total value of $7.5 billion today.
Therefore, if Shiba Inu rose to $1 per token, its total value would be $589.6 trillion. That’s completely unlikely to ever happen, primarily because it’s technically impossible. Here’s a list that will put the valuation in perspective.
The current market capitalization of Apple (NASDAQ: AAPL), the largest U.S. company
U.S. gross domestic product in 2021
The worth of every person, business, and government in the world in 2021
I can comfortably say Shiba Inu will never be worth 245 times what Apple is worth, nor will it ever eclipse the wealth of every person and entity on the planet.
But there might be one path to $1 for Shiba Inu
What if supply were to shrink? That’s exactly what the Shiba Inu community is trying to achieve now through a process called burning. It can be done in several ways, but sending Shiba Inu tokens to a dead wallet is the simplest.
The community has come together to create fun ways to participate, too. Enthusiasts can use the internet search engine Shiba Search, which uses some of its advertising revenue to buy Shiba Inu tokens and burn them. Similarly, Shiba Burn Tube is a channel on Alphabet‘s YouTube video platform that also earmarks advertising revenue for token-burning.
But how many tokens need to be burned to generate a price of $1? All else equal, shrinking the supply to 7.5 billion tokens would theoretically result in a price of $1, based on Shiba Inu’s current value of $7.5 billion.
That’s a 99.9998% reduction, so it would take the participation of almost every single holder in order to make it happen. But here’s the rub: Even if everybody burned 99.9998% of their tokens and pushed the price to $1, they would simply have fewer tokens that are worth more money per token. The dollar value of their holdings would remain exactly the same, making the exercise futile.
There’s only one true method to make Shiba Inu more valuable for investors, and that’s by creating new uses that drive widespread adoption. Unfortunately, that’s unlikely to happen if history is any guide. In any case, Shiba Inu will probably never see $1 per token.
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