During the last crypto bull market of 2020-2021, the price of Shiba Inu reached as high as $0.00008. Due to the great euphoria at the time, expectations surrounding the meme coin quickly spiked, leading to calls for $0.001 SHIB. However, this goal is still as unrealistic as it was then and this report takes a closer look at why.
Not enough of the SHIB supply is being burned
The Shiba Inu Community officially started its burning initiative in 2022 which SHIB tokens will be sent to dead addresses on a weekly basis. Despite being about a year in the making, the total amount of SHIB tokens burned to date is pretty much negligible in the grand scheme of things.
Shibburn, a Shiba Inu burn tracking website, shows that a total of 410,658,326,324,061 tokens have been burned since the first burn. This accounts for just over 46% of the maximum total supply of over 999 trillion tokens. But even more interesting is the fact that community burns make up less than 1% of the total burned figure.
Community burn accounts for less than 0.5% of total burn figure | Source: Shibburn
The vast majority of the burnt figure mentioned above comes from the burn carried out by Ethereum founder Vitalik Buterin. The founders of Shiba Inu had sent half of the token’s supply to Buterin, who then donated 50 billion SHIB to an Indian COVID relief fund and sent the rest to a fire address.
Buterin’s transaction involved more than 410 trillion tokens and was the first on record SHIB fire event. Considering that the SHIB burned so far is 410,658,326,324,061, this means that last year’s community burning accounts for about 0.15% of the total number of tokens burned.
SHIB price stalls below $0.000008 | Source: SHIBUSD on Tradingview.com
Can’t take Shiba Inu to $0.001
The purpose of the burning of the Shiba Inu community was to encourage a rapid reduction in SHIB supply. Because the token’s supply is so large, it has served as a barrier to reaching higher prices compared to its closest rival Dogecoin.
The community burn ensures that tokens are not taken out of circulation as quickly as they need to be, blocking the potential of SHIB’s price going to $0.001. Realistically, for SHIB to rise to $0.001, at least 80% of the supply would need to be burned to make this an achievable goal. This means hundreds of trillions of tokens need to be taken out of circulation, just like Buterin did with his burning.
However, since most of the remaining SHIB supply is already in circulation, i.e. in the hands of millions of holders, such a large burn is impossible. This is because investors don’t want to burn large chunks of their assets, which is like throwing dollar bills into an open fire.
Unfortunately, this means that the price of the meme coin is unlikely to reach $0.001 as the current circulating supply is well over 579 trillion, even more than the portion of the supply that has already been burned.