Shiba Inu (SHIB) is one of the most popular cryptocurrency projects in the market. The asset had an incredible run during the 2021 bull run. SHIB’s price rallied by many million percent from its launch in August 2020 till it hit an all-time high in October 2021.
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Why Did Shiba Inu Rally So High In 2021?
One of the most significant catalysts for SHIB’s incredible rally in 2021 was Vitalik Buterin‘s massive token burn. The Ethereum co-founder received half of SHIB’s supply upon launch. Buterin decided to burn 90% of the tokens he received and donate the rest to charity.
Source: Watcher Guru
Buterin’s actions led to a substantial dip in SHIB’s supply. At the time, the demand for SHIB was also very high. Both developments led to a significant price spike for the dog-themed cryptocurrency. Early investors made millions of dollars in profit with minimal investments.
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What’s The Asset’s Price If 50% Tokens Are Burned?
There are currently about 589 trillion SHIB tokens in circulation. The project will have about 294.5 trillion tokens in circulation if 50% of the tokens are burned. Let’s consider that SHIB’s market cap remains at $15.87 billion. In this scenario, the price of each token will hit $0.00005388. Hitting $0.00005388 from current price levels will entail a rally of about 99.8%. The rally may seem significant, but it still falls short of SHIB’s all-time high of $0.00008616.
If SHIB’s market cap increases and its circulating supply drops, the asset’s price could go much higher than $0.00005388.
Source: Watcher Guru
Shiba Inu’s lead developer, Shytoshi Kusama, also highlighted that burns alone would not push SHIB’s price. Burns have to be coupled with an increase in demand for a substantial price spike.
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The SHIB team is reportedly working on a new burn mechanism, which is rumored to destroy trillions of tokens yearly. The new burn mechanism could help propel SHIB’s price to new highs.
