It’s no mean feat for a token to rise to public notoriety given that tens of thousands of them currently exist. But Shiba Inu is that rare token that captured the public’s attention, at least for a while. Trading now at $0.00001097, the question looms: Will Shiba Inu hit $1?
Meme Token Bubble
At its peak in October 2021, Shiba Inu had a $32.8 billion market capitalization. The market cap today is closer to $6.4 billion. It’s been a massive collapse and highlights just how far this meme token has fallen.
Obviously, it’s not alone. Even the gold standard of cryptocurrencies, bitcoin, fell from $65,000 to $25,000 over the same period. But it’s one thing to crash 61.5% and another to crash 84%. Bitcoin would need to rise by 162% to eclipse its former high whereas Shiba Inu would need to pop by 412%.
So, Shiba Inu ever recover or was it caught up in a meme token bubble that has forever popped?
Of the 20k tokens circulating, Shiba Inu remarkably has held its ranking well on lists of top cryptocurrencies by market capitaliazation. Top of the list is Bitcoin with a $480 billion market cap followed by Ethereum at $201 billion. Tether, Binance Coin, USD Coin round out the top 5. In spots 6-10 are Ripple, Cardano, Polygon, Dogecoin and sEth. Surprisingly, Shiba Inu is hot on their heels, sitting in 14th position overall.
Can Shiba Inu Hit $1?
All tokens are not made equal and one of the primary attractions to Bitcoin is precisely what’s holding Shiba Inu back. Bitcoin famously has “just” 21 million coins in circulation – even less when you factor in those that have been lost. Shiba Inu, by contrast, has 589 trillion tokens. Yes that’s a “T” for TRILLION.
So a $1 token price would translate to a $589 TRILLION market capitalization. Now just for some perspective, the GDP of the entire United States is $23 trillion. So to reach $1, Shiba Inu would need to be 25x larger than the gross domestic product of the entire United States.
To put things further in perspective, the GDP of the entire world is $96 trillion. So a $1 token price for Shiba Inu would equate to a GDP 6x bigger than the entire world’s gross domestic product. In short, it won’t happen unless the token supply is vastly reduced.
Will Shiba Inu Go Up?
Since the beginning of the year Shiba Inu has had some wild price action. It’s no surprise that its moves are amplified versus the more stable cryptocurrencies like Ethereum or Bitcoin. Still, the upcoming launch of Shibarium public beta has excited token holders who are betting on a more scalable network that makes transactions cheaper and faster.
This is an important development because, to-date, the meme token has acted more like a trading vehicle. While bitcoin arguably has a useful purpose as a place to store wealth and ethereum has a wide-range of use-cases, Shiba Inu has little purpose in the real world, other than as a speculative trading name. That makes it difficult to assert whether the $6 billion market cap is fair or not.
Famously, Buffett and Munger argue cryptocurrencies and tokens such as Shiba Inu have no value because they produce no cash flows. The community’s efforts to build a utility that adds value to the world could justify the market cap and then some, though.
But to the overarching question of whether Shiba Inu will hit $1, the short answer is no, not with its current supply of 589 trillion tokens.