Sokipiriye Dokubo
The Shiba Inu (SHIB) ecosystem has faced a downtrend in its price recently, unlike several other cryptocurrencies that have hit new all-time highs. Despite this, SHIB still has the potential for a comeback. Some believe that network updates might boost SHIB’s price, while others have faith in the coin’s burning mechanism.
The Impact of the 2021 Token Burn
In 2021, the Shiba Inu market saw a significant event when Ethereum co-founder Vitalik Buterin transferred 410 trillion SHIB tokens to a burn wallet in May that year, effectively taking them out of circulation. This burn accounted for about 41% of the total SHIB supply. Following this, SHIB surged to an all-time high of $0.00008845 in October 2021 amid an upward trend in its price. Currently, SHIB is trading at $0.00001382, having dropped by 10% in the last 24 hours and sitting 84% below its all-time high.
Potential for a New All-Time High Through Another Burn
The current circulating supply of Shiba Inu is 589 trillion SHIB, with a market cap of $10.07 billion. If another 410 trillion tokens were burned, the circulating supply would significantly decrease to around 179 trillion SHIB.
Consider the potential impact with two scenarios:
1. Market Cap Growth Scenario:
If the market cap grows in proportion to the reduced supply, increasing by a factor of 3.29 (calculated as 589 trillion divided by 179 trillion), it would reach $33.12 billion. At this market cap and a circulating supply of 179 trillion, SHIB’s new price would be approximately $0.000185. This presents a 983% surge from the current value, possibly pushing SHIB towards a new all-time high.
2. Static Market Cap Scenario:
If the market cap remains at $10.07 billion after burning 410 trillion tokens, the reduced circulating supply would still impact the price. With 179 trillion tokens in circulation and a market cap of $10.07 billion, the price of SHIB would be around $0.0000562. While lower than the previous all-time high, this price would still signify a significant rise from current levels.
Uncertainty Surrounding Future Burns
It is uncertain whether Vitalik Buterin or any other major entity will initiate another substantial SHIB token burn. While the possibility exists, it remains speculative. Nevertheless, a significant reduction in the circulating supply through burning could noticeably affect SHIB’s price, depending on market dynamics and investor sentiment.
In summary, while burning another 410 trillion SHIB tokens could greatly impact the supply-demand balance and potentially drive the price higher, achieving a new all-time high would rely on multiple factors, including market cap growth and broader market conditions.