The Shiba Inu rose to prominence during the 2021 retail investor frenzy. In a year, he generated a return of 43,800,000%, blowing up all other asset classes, including other cryptocurrencies.
In dollar terms, this would turn the $2.29 investment into $1 million.. For example, the same investment $2.29 in Bitcoin Leading Cryptocurrency Would Return Just $3.65since this token added only 59.8% in a year.
But most of the air has slipped away from the Shiba Inu after it hit its all-time high of $0.000089 in October. In fact, it has since dropped 86% to just $0.000012 today. The Shiba Inu community is still hoping for a resurgence, so what is really stopping the token from skyrocketing to $1?
This is what the math says
The Shiba Inu faces many obstacles, from lack of adoption to new regulations, but he is not the only one suffering from these problems. The same issues affect the entire cryptocurrency industry. Even major tokens have failed to gain widespread support from businesses or consumers as payment mechanisms.
The main obstacle for the Shiba Inu on the way to $ 1 is, on the contrary, its huge supply. There are 589 trillion tokens in circulation, so at a current price of $0.000012, their total combined value is currently 6.9. billions of dollars. If the Shiba Inu rises to $1 per token, simple math suggests that their total value would be $589 trillion.
There are several problems with this number. First of all, the Shiba Inu is said to be 264 times more expensive than Apple, which is the largest company in the world and makes smartphones, computers and a host of other products. It is unlikely that a Shiba Inu, which produces absolutely nothing, deserves such a high capitalization.
But this idea becomes even more ridiculous when you consider the current net worth of all the wealth recorded on Earth right now. This figure is close to $431 trillion, meaning that if every individual, company, and government converted all of their money and assets into shiba inu, that would justify a price of just $0.73 per token.
So the solution seems pretty simple: Remove as many Shiba Inu tokens from the offer as possible.
Enter the Metaverse
The Metaverse is a set of hosted worlds in the realm of virtual reality, and developers Shiba Inu created one for their community. It will include an exclusive area for Shiboshi Non-Fungible Token (NFT) holders, games, and over 100,000 virtual lands. Transactions in the SHIB metaverse will be facilitated by Ethereum, but Shiba Inu tokens will play a unique role that can help reduce supply.
Virtual land owners will be able to name their lots in exchange for a fee paid in Shiba Inu tokens. These tokens will then be “burned down“, that is, withdrawn from circulation forever. As the supply decreases, the price of each token will have to gradually increase in order to maintain the current market value of Shiba Inu of $ 6.9 billion. In other words, if 10% of the 589 trillion tokens are burned, each the token will organically rise in price by 10% (theoretically).
But how many Shiba Inu tokens do you need to burn to get the price to $1?
Assuming the total value of the Shiba Inu at $6.9 billion stays the same, the existing supply of 589 trillion tokens will have to be reduced to 6.9 billion. This is a 99.99998% reduction..
But even if this happens, the result may not be what investors expect. For this to work, each Shiba Inu holder needs to burn 99.99998% of their tokens, meaning their total position value will remain the same. The organic increase in value to $1 per token will be fully offset by the huge reduction in the number of tokens they own.
The only way to create real value for the Shiba Inu is to find some form of real utility that could cause more widespread adoption. If there is no need for people to own a Shiba Inu, then it will simply remain a speculative vehicle.
In the current state of affairs, no reason to The Shiba Inu reaches a valuation of $589 trillion, so $1 per token is completely out of the question. However, a massive burn can reach a price of $1, even if it doesn’t really mean anything.
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