Shiba Inu (SHIB) fans and investors have long pursued higher prices for the popular cryptocurrency. The one-cent and $1 price points are particularly popular targets for the Shiba Inu community. The one barrier holding SHIB from hitting the one-cent or $1 target is the project’s massive supply. There are about 589 trillion SHIB tokens in circulation. If the price of each token hits $0.01 or $1, the project’s market cap would reach an unrealistic high figure. The only way for the coin to hit the $1 mark is for the project to drastically reduce its supply.
Can Shiba Inu Burn Enough Tokens to Hit the $1 Mark?
One of the most substantial catalysts for SHIB’s incredible 2021 rally was Vitalik Buterin‘s token burn. The Ethereum co-founder received half of SHIB’s entire supply after launch. Buterin decided to burn 90% (around 410 trillion) of the coins he received. The move led to a massive supply dip and a sudden rise in prices.
It is highly unlikely that the SHIB team can undertake another massive burn on the same magnitude as Buterin’s. However, there are reports that the SHIB team is working on a new burn mechanism. Many say that the new burn mechanism can burn trillions of tokens yearly. The move could lead to a substantial price rally for SHIB. But, will it be enough to hit $1?
Let’s assume that the new burn mechanism can burn 5 trillion tokens yearly. On the other hand, let’s limit SHIB’s market cap to a realistic $500 billion at some future date. At this stage, we would need a circulating supply of about 500 billion tokens. The project would have to destroy about 588.5 trillion tokens. A burn rate of 5 trillion coins per year would take a whopping 117.7 years to burn through 588.5 trillion coins. Even if we remove 10 trillion coins per year, it would take more than 50 years to destroy 588.5 trillion.
Also Read: Shiba Inu Bounces Back: Is the Bear Market Finally Over?
While a bigger burn mechanism may help push Shiba Inu (SHIB) to higher prices, it may take a very long time to realistically hit the $1 mark.
Credit: Source link
