Can Shiba Inu Reach $0.01?
The cryptocurrency market never ceases to amaze, with its roller-coaster trends and speculative buzz. One of the coins at the center of attention in recent years is Shiba Inu (CRYPTO: SHIB), a meme coin that has captured the imagination of many investors.
As an ERC20 token on the Ethereum network, Shiba Inu enjoys solid security and the powerful ability to execute smart contracts, but its developers made several choices that make this coin less useful than other Ethereum offshoots. Still, a smart marketing effort using incredibly cute dogs has kept Shiba Inu in the headlines, despite its plunging token price.
A burning question in the minds of these enthusiasts is whether Shiba Inu can hit the elusive $0.01 mark. It's just a penny per digital coin -- that sounds reasonable, right?
Current market trends
In mid-December 2023, Shiba Inu's price hovers around $0.000001 per token. Its total market value is $5.8 billion, based on a circulating supply of 589 trillion tokens.
Forecasts for the year 2023 suggest a modest increase in Shiba Inu's value, with cryptocurrency exchange Changelly predicting approximately $0.0000102 by year-end. Coinpedia disagrees, placing the year-end price target at $0.000014. These predictions are based on technical analysis and social media posts. Analyzing the accuracy of such price forecasts is a topic for another day. For now, let's just say that market watchers expect very mild price gains by the end of 2023.
More to the point, these predictions fall short of the $0.01 mark by several orders of magnitude. I mean, a 2% gain isn't even in the right zip code. The meme coin has a long and difficult road ahead before it's worth a full penny per token.
The Sisyphean task ahead
To reach $0.01, Shiba Inu would require growth that's nothing short of astronomical. A 100-fold increase would barely bring it to $0.001, which is still just a tenth of the desired value. At the same time, achieving such a surge would propel Shiba Inu's market cap to a staggering $577 billion, assuming the current share count remains constant. Depending on what the rest of the crypto market does in the same period, a Shiba Inu worth half a trillion dollars would easily land among the top three digital coins by market value.
This is a formidable challenge, given the scale of growth required and the market dynamics involved.
Token burn: A viable strategy?
One strategy that's often cited to boost Shiba Inu's value is token burning. By sending tokens to so-called burning portals or "black hole" addresses, they are permanently removed from circulation. The recently launched Shibarium offers a different token in return for burning a certain amount of Shiba Inu, with the aim of inspiring a faster voluntary burn rate.
However, to make a significant dent, an enormous amount of Shiba Inu tokens would need to be burned, almost to the point of annihilating the current supply. This scenario seems highly implausible and doesn't present a realistic pathway to reaching the $0.01 target. The honeymoon period of Shibarium's official burn portal resulted in 20 billion burned tokens over the first six days. That sounds like a lot, but 20 billion Shiba Inu coins are only worth $196,000 today. It's a drop in the encrypted ocean.
Practicality in transactions
Another aspect to consider is Shiba Inu's practicality in real-world transactions. Its low price and high token count make it difficult to understand its value and use it for everyday purchases.
For instance, buying a loaf of bread could cost millions of Shiba Inu tokens, a concept that's hard to grasp for the average consumer. I did the math for you, by the way -- 1 million Shiba Inu is worth roughly $10 right now.
And I don't think you want to whip out a calculator to make sure you're getting it right every time you buy something with Shiba Inu. Nobody wants to count zeros before or after the decimal point to make sure the price isn't wrong by a factor of ten or 100. Only a dramatic price increase can fix this issue, but there is no quick and easy way to execute this change.
Since cryptocurrencies mainly earn their value from everyday usage in actual transactions, Shiba Inu's microscopic price becomes a self-fulfilling prophecy.
Conclusion: $0.01 is a distant dream for Shiba Inu
In conclusion, while the crypto market is unpredictable and full of surprises, the prospect of Shiba Inu reaching $0.01 in the near future appears highly unlikely.
The sheer scale of growth required, coupled with practical limitations in usage, makes this target a distant dream. Unless there's a seismic shift in the market dynamics or the value of the U.S. dollar, expecting Shiba Inu to hit $0.01 per token remains a speculative gamble.
So if you're buying Shiba Inu today, I hope you're ready to settle for prices at a fraction of a cent for the foreseeable future. And if that probable outcome doesn't sound appealing, I see several superior investment ideas in the crypto market right now. Their mascots may not be as adorable as a bright-eyed Shiba Inu puppy, but their real-world usage prospects are more robust.
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Anders Bylund has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.
Can Shiba Inu Reach $0.01? was originally published by The Motley Fool
