Could the Shiba Inu Cryptocurrency Reach a Dollar by 2025, Given the Challenge of a $589 Trillion Issue?
Dogecoin's Relative, SHIB (up by 2.35%), caused a stir when it entered the crypto market. Its performance in 2021 was astounding, yielding a return of 45,278,000% - enough to convert an initial investment of $3 into more than $1 million!
However, this early success proved to be nothing more than a speculative bubble. By mid-2022, SHIB had plummeted more than 90%. But it's currently making a comeback, with a gain of approximately 160% in 2023. Despite this, it's still far from its all-time high of $0.000086.
The crypto market is currently benefiting from several growth factors, which might indicate that SHIB is preparing for another significant surge. Could 2025 be the year it soars from its current price of $0.000028 all the way to $1? There's a substantial mathematical hurdle to overcome, and it might leave your head spinning.
SHIB lacks realistic foundations yet thrives due to the Trump influence
To put it bluntly, SHIB serves no real purpose. It's commonly referred to as a meme coin, so its value often fluctuates based on the whims of retail traders and speculators. According to Cryptwerk, only 1,048 merchants worldwide accept SHIB as payment for goods and services, with many of these being obscure online businesses and gambling websites.
Without widespread adoption by consumers and businesses, it's challenging for any currency to maintain value over the long term. The SHIB community has attempted to create new use cases to combat this issue. For instance, in 2021, developers started building a metaverse where investors could spend their tokens to personalize virtual plots of land. However, despite their efforts, the metaverse has yet to launch (and there's no guarantee it ever will).
In 2023, developers also launched Shibarium, a Layer-2 blockchain solution that improves on the inefficiencies of the legacy Ethereum network on which SHIB is based. Shibarium makes transactions using SHIB tokens cheaper and faster. If successful, this could potentially boost adoption. However, as of now, it hasn't made a significant impact.
But Donald Trump's recent election victory altered market sentiment. He was a crypto critic earlier but later became an advocate in the lead-up to the election. Now, he's so supportive of cryptocurrencies that you could call him a champion.
Trump has discussed establishing a strategic Bitcoin reserve within the U.S. government, and he's even nominated a pro-crypto businessman, Paul Atkins, to lead the Securities and Exchange Commission (SEC). This could potentially benefit speculative coins like SHIB, as fewer regulations could pave the way for new use cases, thereby increasing value.
However, a $589 trillion impediment faces SHIB
One thing a pro-crypto Trump administration can't overcome is SHIB's supply issue, which is arguably the most significant obstacle to another record-breaking climb. As of now, over 589.5 trillion tokens are in circulation, giving SHIB a market capitalization of $16.6 billion based on its current token value of $0.000028.
Simple mathematics suggests that a token price of $1, multiplied by SHIB's current supply of 589.5 trillion tokens, would give it a market cap of $589.5 trillion. This would make it 157 times more valuable than Apple, the world's largest company (its market cap is currently $3.75 trillion).
It would also make SHIB more valuable than the total wealth of every person on Earth, which was $454 trillion in 2022, according to UBS. In essence, SHIB reaching $1 per token is impossible at this stage.
However, the SHIB community is attempting to resolve the problem through token burning, which removes tokens from circulation permanently. Investors can participate in this process by sending their tokens to a dead wallet that cannot be retrieved. In theory, the increased scarcity of tokens should drive up their value.
Could SHIB reach $1, but with unanticipated results for investors?
To justify a $1 token price, 99.99998% of all tokens would need to be burned. This means the current supply of 589.5 trillion tokens would need to be reduced to 16.6 billion, based on SHIB's current market cap.
Almost 1.7 billion tokens were burned in November, which equates to an annualized burn rate of 20.4 billion. At this pace, it would take 28,897 years to burn enough tokens for SHIB to reach $1 – making a 2025 milestone impossible.
Even if investors somehow lived to witness this day, they wouldn't profit. Burning tokens only reduces supply, making the remaining tokens more valuable – but it doesn't create value. Investors would only have 99.99998% fewer tokens than they previously owned, each now worth $1. Their net position would remain the same, as SHIB's market cap would still be $16.6 billion. Talk about a futile exercise!
The potential for a pro-crypto administration under Donald Trump could lead to fewer regulations, which might create new use cases for SHIB and increase its value. However, due to its enormous supply of over 589.5 trillion tokens, reaching $1 per token is mathematically impossible at this stage, as it would make SHIB more valuable than the total wealth of every person on Earth.
