Shiba Inu: Can SHIB hit $1 if 90% of supply is Burned?

Paigambar Mohan Raj
Source: DMARGE

Shiba Inu (SHIB) is one of the most popular and successful crypto projects. The canine-themed crypto has witnessed returns of around 11430362.4% since its inception in 2020. Nonetheless, some users are eagerly waiting for the token to hit $1 someday. However, there are several aspects to consider before such a price point pans out. Several barriers may hinder the token’s pursuit of $1.

Shiba Inu (SHIB), like any other memecoin, relies heavily on social media for its growth and popularity. The lack of use cases is compensated by social sentiment. Other major crypto projects, such as Ethereum (ETH), have several use cases which make adoption easier. That said, SHIB is very close to launching its layer-2 network called Shibarium. However, the capability of the upcoming network is yet to be seen.

Moreover, most SHIB tokens are held in the hands of a few whales. This makes SHIB very prone to a sell-off. If the whales were to dump their holdings, SHIB’s price would take a massive hit, destroying its $1 ambitions.

Shiba Inu’s extremely large circulating supply seems to be the biggest barrier to it reaching $1. Although burns are reducing the supply, it is not happening at a significant rate to make a difference.

Will Shiba Inu burns on Shibarium help propel it to $1?

SHIB launched its burn portal in April 2021. The mechanism sends SHIB tokens to two dead wallets, removing them from circulation. However, the burns have not been enough to have much of an impact on SHIB’s price.

However, the team has confirmed that the Shibarium network will also participate in burns. But the scale of burns is not yet known. SHIB proponent Queenie said on Twitter that Shibarium could potentially burn trillions of tokens every year. This would reduce the circulating supply of SHIB and give a boost to its price.

Let’s assume that 90% of SHIB’s supply is burned, and 50 trillion tokens are in circulation. If SHIB was to hit $1, this would mean a $50 trillion market cap for Shiba Inu. For the record, the GDP of the United States is $23 trillion. Therefore, SHIB would have a market cap greater than the entire United States.

Hence, SHIB would have to burn over 99% of its supply and bring it down to the billions, if not millions, if it has to realistically reach $1. This level of burns will take decades at current burn rates. However, with Shibarium, the process might be faster and more efficient.