Shiba Inu could soar to unimaginable heights in the coming years if Shibarium burns a substantial amount of SHIB, with price projections potentially running into the $0.01 and $0.001 territories.
Shibarium launched on the mainnet in August 2023, triggering elation across the Shiba Inu community. However, the layer-2 network started recording a more substantial adoption rate from late November 2023, processing over 20 million transactions from Dec. 1 to 3.
Shibarium Bolsters Shiba Inu Burns
For context, Shibarium only processed 3.3 million transactions in its first eight weeks of launch. Transactions skyrocketed to a daily average above 7 million from late November, and this uptick led to one of the much-anticipated utilities of the network: Shiba Inu burns.
While Shibarium presents much more promise than SHIB burns, most community members awaited its arrival to see the burn campaign bolstered. The Shibarium documentation revealed that the network would incinerate SHIB with 70% of its base transaction fee.
Nonetheless, Shibarium burns did not materialize until early December 2023, with the first burn involving 8.24 billion SHIB worth $75,241 on Dec. 4. The burns have picked up since then, with Shibarium burns totaling 33.8 billion tokens across four transactions as of Dec. 23.
This year has also seen a Shibarium burn, with 9.93 billion SHIB incinerated from Shibarium fees on Jan. 9. With the burns seeing an uptick, the Shibarium development team is looking to pivot to an automated burn mechanism. But the question is, how could these burns affect Shiba Inu’s price?
The Need to Reduce SHIB’s Supply
Shiba Inu currently has a circulating supply of 581.2 trillion tokens. Many have attributed SHIB’s inability to record massive rallies to this massive supply, leading to the support surrounding the burn campaign.
SHIB hit its ATH of $0.00008845 shortly after Vitalik Buterin burned 410 trillion tokens in May 2021. While some arguments suggest that the surge to $0.00008845 was also bolstered by increased demand, the place of burns cannot be denied.
With the imminent advent of an automated burn system and increased Shibarium adoption, proponents have projected a growth in monthly burns running into trillions. Should Shibarium burn 9 trillion tokens a month, how long would it take for Shiba Inu to clinch lofty price targets such as $0.001 or $0.01?
How Long Until Shiba Inu Hits $0.001 or $0.01?
Burning 9 trillion a month would translate to 108 trillion tokens annually. At this rate, half of the supply (290.5 trillion tokens) could be incinerated in less than three years. For Shiba Inu to maintain its market cap of $5.3 billion at 290.5 trillion tokens, its price would need to surge to $0.0000183.
In another year of burns, an additional 108 trillion tokens could go out of existence, leaving 182.5 trillion tokens in circulation. At this supply, a $5.3 billion market cap would bring Shiba Inu’s price to $0.0000293 within a space of four years.
However, at its peak market cap of $43.5 billion, attained in May 2021, Shiba Inu would trade at $0.00024 if its circulating supply stood at 182.5 trillion tokens. The asset would only hit $0.001 at this circulating supply if its market cap reaches $182 billion and $0.01 if valuation clinches $1.82 trillion.
Shiba Inu currently trades for $0.00000907, requiring a 10,925% rise to $0.001 and a 110,153% surge to $0.01. There is no guarantee that Shiba Inu would hit any of these targets. However, these evaluations present useful educational insights on the requirements for such a rise.