Formed as a knowing nod to the meme coin DOGE, SHIB became coveted by not only investors but major crypto exchanges—with the likes of Binance and Coinbase acting quick to list the small-cap altcoin. After the mania, SHIB sits some 85% adrift from its all-time high value of $0.000086.
What would it take for Shiba Inu to reach $1? And is such a feat even possible?
The “Dogecoin Killer”
On the surface, it’s unsurprising that SHIB experienced its first parabolic rise in value in early May 2021. This period was characterized by the minting of countless meme tokens designed to emulate the success of Dogecoin and rally in a similar way to GameStop and AMC Entertainment on Wall Street.
During this period, we saw a flurry of Dogecoin-themed tributes, or even imitations, arrive on the market, with many creators also incorporating DOGE cheerleader Elon Musk into their newly minted coins.
With the rise of assets like Dogelon Mars (ELON), Baby Doge Coin (BabyDoge), Samoyedcoin (SAMO), and Shiba Predator (QOM), investors have plenty of choice when it comes to investing in meme-based assets. Yet, one year on, the only coin that has come close to possessing the staying power of Dogecoin is Shiba Inu, which currently ranks 14th in terms of cryptocurrencies by market capitalization. No other meme coin outside of DOGE or SHIB ranks inside the top 100.
So what makes Shiba Inu special? And why did Coinbase and Binance move to list the asset so quickly?
Despite first reaching prominence in May 2021, Shiba Inu was created on the Ethereum blockchain in August 2020. The asset’s creator is entirely anonymous, and the terms of its creation are uncertain. The only purpose SHIB was believed to serve was to become the “Dogecoin killer,” though this is likely to be more of a joke than a threat.
The SHIB Ecosystem Explained
Interestingly, the Shiba Inu ecosystem consists of more than just SHIB; there are also cryptocurrencies named LEASH and BONE. While LEASH is extremely limited, with just 107,000 tokens in circulation, BONE, as Shiba Inu’s governance token, has a far larger volume of 250,000,000 tokens.
Crucially, SHIB has a total supply of 999.99 trillion tokens, making it far more commonplace than DOGE’s current circulation of some 133 billion tokens. However, it’s worth noting that in May 2021, half of Shiba Inu’s supply of tokens were sent to Vitalik Buterin, co-founder of Ethereum. Buterin decided to burn 90% of his tokens and donate the remainder, causing SHIB’s circulating supply to fall to around 589 trillion.
As Shiba Inu’s price history shows, the cryptocurrency has never come close to even one cent, let alone $1. Circulating supply plays a major role in determining this low price. Because of the trillions of SHIB currently in circulation, there’s simply no scarcity to deliver a higher USD value for the asset, despite the coin currently ranking higher than more expensive tokens like AVAX, ATOM, and LINK.
In terms of practical usage, Shiba Inu has virtually zero utility. The asset simply exists to be the world’s most prominent meme token, which means that it’s powered solely by market sentiment and pre-existing crypto cycles.
However, SHIB’s popularity can’t be understated, and the positive sentiment towards the coin has already seen extraordinary growth from 2021 and throughout 2022. Not only did the cryptocurrency stage an improbable comeback to rally in late October 2022, but SHIB was also adopted by a range of retail outlets like GameStop, which allowed us to make purchases using SHIB in-store.
Such feats are uncommon for meme tokens created in Dogecoin’s wake, and they serve as a reminder that it’s not always wise to write this particular meme coin off completely.
Could Shiba Inu Ever Make it to $1?
So, could Shiba Inu ever make it to $1? The answer is almost certainly not—or, at least, not with current circulation levels.
Bitcoin’s current market value, which typically ranges within the $10,000s, is driven by the coin’s fixed scarcity of having a maximum supply of 21,000,000 tokens that can ever be minted. At around 589 trillion tokens, SHIB’s market capitalization would need to be $589 trillion to reach a coin value of $1. Considering that Motley Fool recently reported that the total global wealth stands at around $500 trillion, this is a mind-boggling figure to come to terms with.
However, should Shiba Inu’s circulation fall drastically, like when Vitalik Buterin burned half of the coin’s total supply, greater scarcity could impact the coin’s value.
For investors, there are a few more heartening signs. SHIB’s creation on the Ethereum blockchain means that it’s far more accessible than other small-cap meme tokens, and it’s paved the way for the likes of Binance and Coinbase to add the asset to their respective options with relative ease.
SHIB Adoption May Increase Despite Low Value
With such significant levels of adoption, it seems that investor sentiment has leveraged more usability for SHIB, and the fact that stores are beginning to accept the cryptocurrency means that some form of utility has been forged for the coin.
As for the path to $1, let’s take a deeper look at a more logical circulation level. The closest asset to Shiba Inu in terms of market capitalization and proximity to a $1 value is Polygon (MATIC), which has a value of $0.85 at the time of writing. This coin’s circulating supply is $7.44 billion. Using this as an indicator, it would mean that SHIB’s circulating supply would need to fall to almost a 100,000th of its current level to experience the same price in the current crypto market.
For investors who believe in the potential of cryptocurrencies, we are largely confident that a new bull crypto market will help to create a strong market-wide rally that will drag more prices upwards, but in terms of growth, it’s extremely rare for an established asset to rally 100,000% in this manner.
SHIB Remains a Coin to Watch Out For
Although Shiba Inu is an outstanding example of a meme coin success story, SHIB’s 589 trillion token circulating supply has rendered the notion of a rally to $1 all but impossible—barring a sudden shrinking of coins in circulation.
Despite this, a wave of positive sentiment has forged a layer of utility for the token. Investors may find that SHIB can continue to build momentum long into the future, making it one of the most promising and sustainable meme-based investment options.
The information on this website does not constitute financial advice, investment advice, or trading advice, and should not be considered as such. MakeUseOf does not advise on any trading or investing matters and does not advise that any particular cryptocurrency should be bought or sold. Always conduct your own due diligence and consult a licensed financial adviser for investment advice.
This news is republished from another source.