Shiba Inu (SHIB) has a good chance of increasing its price over time with its continuous burning mechanism, with proponents pondering how high it could go amid sustained burns.
Shiba Inu is a deflationary protocol with proven consistency in the number of tokens burnt. At the time of writing, Shiba Inu has burnt 39 million tokens over the past 24 hours, representing. This latest burning brings the total SHIB burnt to 410.6 trillion tokens.
Implication of the SHIB Burn
The idea behind burning a token is to reduce its overall supply. This reduced supply fuels scarcity, which can push the asset’s price higher if it matches increased demand. In the case of Shiba Inu, the total circulating supply is 579.7 trillion SHIB.
Assuming this supply drops by 50% in the future, the price of SHIB will need to double from its current level to sustain its market capitalization above the $4.061 billion threshold.
The mechanism underpinning this economics is simple. With a reduced supply, SHIB investors might attach more value to the protocol and inject more capital to buy SHIB, driving the price higher.
This assumption in SHIB’s price elevation with deflated supply is not necessarily feasible. Other unforeseen factors may keep the token’s price below expectations to model real-world market realities.
In all, the potential of Shiba Inu in the long term is visible and can be accelerated by the burning feature encoded in the protocol.
One fundamental expectation in SHIB’s price, if burning becomes optimal, is the likelihood of the price touching $0.01 in the long term. For this to happen, SHIB must soar by about 1,421,460.18% from its current price level of $0.000006879. Such a surge remains ambitious.
Potential Drawbacks in SHIB Burning
Shiba Inu launched its layer-2 scaling solution Shibarium in August to introduce new use cases for its users. One of the critical goals of Shibarium was to serve as a conduit to burn some SHIB tokens, adding to the established model to reduce the asset’s supply.
Over time, Shibarium’s role in this regard has been relatively offbeat. With the promises of a burn portal by the core team building Shibarium, hopes abound regarding its contribution to Shiba Inu’s deflationary plans in the near term.
