Having more than doubled in 2023, the crypto asset class appears to have officially emerged from the harsh crypto winter. With renewed optimism and hopes of a bull market on the horizon, it's time to check out one of the top performers from the last bull run in the cryptocurrency market. Shiba Inu (Code: SHIB).
Just when it seemed like all cryptocurrencies were making incredible gains in 2021, the Shiba Inu came out of nowhere and took the throne. Meme Coin has grown over 28,000,000% and is currently his 19th most valuable cryptocurrency in the world. The Shiba Inu's next landmark is the coveted $1 mark. But can it be done?
Shiba Inu gets a big makeover
Several factors influence the price of cryptocurrencies, but there is no fixed formula for determining them. The most common idea is that the value of a cryptocurrency is directly proportional to its demand, which often stems from the innovative ways in which the currency can be used by its owners.
Moreover, since this is a cryptocurrency, speculation also plays an important role. During the last bull market, Shiba Inu's price hike was driven by pure speculation, as Shiba Inu had no unique features or use cases compared to other cryptocurrencies on the market.
Recognizing the token's inadequacies, over the past two years Shiba Inu's developers have undertaken the monumental task of increasing its utility. In doing so, they hope the Shiba Inu will shed its status as a meme coin and be taken a little more seriously.
Amazingly, great progress has been made. Currently, Shiba Inu owners can utilize the tokens as well as some of the top cryptocurrencies on the market. Thanks to its transformation, Shiba Inu can be used for yield farming, buying and selling non-fungible tokens (NFTs), and several other applications that are part of the decentralized finance (DeFi) economy. There are even ambitious plans to launch a Shiba Inu-based metaverse.
induce artificial value
Shiba Inu dogs have come a long way. Its loyal community and dedicated developers are working hard to make a fresh start. However, there is one obvious problem. That's the huge supply.
As of February 7, there are over 589,281,128,753,700 Shiba Inu tokens in circulation. As part of the Shiba Inu's revamp, a combustion mechanism was introduced to draw out large supplies. The technicalities of how it works is a topic for another day, but it's becoming clear that the burn isn't having the intended effect.
Believe it or not, Shiba Inu was originally supplied with a total of 1,000 trillion tokens. However, since the start of the burn mechanism in April 2022, over 410 trillion tokens have been removed, representing about 41% of the previous supply.
For almost all other cryptocurrencies, a 41% decrease in supply could result in a significant price increase. However, this was not the case with Shiba Inu. In fact, the Shiba Inu has been losing market share since the burn began.
an insurmountable obstacle
The large supply of Shiba Inu dogs makes the prospect of a $1 price virtually impossible. This would require a staggering 9,816,570% increase in tokens. Shiba Inu dogs have made jumps like this before, but at this size it is much less likely that they will be able to lift their legs. If the price per token reaches $1, it will not only become the most valuable cryptocurrency, it will eventually be worth more than the entire global economy.
Reaching $1 is like defying gravity. That can't happen. No matter how explosive the next bull market is, there is no chance that Shiba Inu will reach his $1. No matter how you look at it, this dog may have reached its last day.
Should you invest $1,000 in a Shiba Inu right now?
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RJ Fulton has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
Will Shiba Inu ride the virtual currency bull run and reach $1 in 2024?Originally published by The Motley Fool
