After orchestrating a stellar run in the 2021 bull season, Shiba Inu’s (SHIB) popularity grew among crypto enthusiasts, as it became an investment of choice, especially for investors with meager capital.
Having claimed a $0.00008 all-time high (ATH) around October 2021, the belief has been that the coin would ascend to even greater heights. However, contrary to the shared sentiments, SHIB has struggled to replicate its previous form.
According to CoinGecko’s statistics, the canine-themed coin is changing hands at about $0.000022, having witnessed a 4.2% decline in the past 24 hours. In addition, the token is approximately 74% below its ATH, implying that it has a long way to reclaim the previous feat.
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What Has Been The Problem?
Despite showing full potential for massive appreciation, Shiba Inu’s main drawback has always hinged on its enormous 589 trillion circulating supply. Unfortunately, this peculiar problem did not receive due attention, compounding SHIB’s current situation that has seen it maintain price levels below normal expectations.
While Shiba Inu’s (SHIB) main problem might stem from its massive supply, it is worth mentioning that there are also contributions from the overall market outlook, which has not been favorable for most crypto assets.
Emergence Of A Solution
Following recognition of what could become of Shiba Inu’s ecosystem if the coin’s supply pool remains huge, Shibarium, a layer-2 scaling solution, came on board.
However, the solution network has failed to hit the ground running, as most SHIB enthusiasts would have anticipated. So far, it has succeeded in incinerating roughly 56 billion tokens in its approximately nine months of existence.
Notably, Shibarium’s main purpose is to reduce SHIB circulating supply using a specified portion of its gas fees, implying that the network solution burn rate depends on its adoption rate, which has not been encouraging despite existing for months.
Nevertheless, hope still abounds about the potential of the scaling solution to gather momentum sufficient to incinerate SHIB in larger quantities, especially with new plans to integrate an automatic burn mechanism via the Shibarium network.
Price Implications Of Incinerating SHIB At 100T Per Annum
Presently, Shiba Inu boasts a market capitalization of about $13 billion, as against its ATH market cap valuation of approximately $36 billion.
The above implies that SHIB possesses tremendous growth potential, especially with a drastic reduction in its circulating supply. In a scenario where the Shibarium could orchestrate significant incineration rates to eliminate about 100 trillion SHIB per annum, it invariably implies that about 500 trillion SHIB will be incinerated by 2029.
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Eliminating 500 trillion SHIB coins between now and 2029 indicates that the token’s circulating supply would reduce to 89 trillion.
For SHIB at $0.005 in 2029 with an 89 trillion circulating supply, Shiba Inu’s market capitalization would be roughly $445 billion. On the other hand, SHIB at $0.0025 with a similar circulating supply will result in a $222.5 billion market capitalization.
While the above market capitalizations might appear ridiculous, it is not far-fetched. It illustrates how a significant burn rate could impact SHIB’s price.
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