Just a few short weeks ago, I posed the question about whether or not Shiba Inu (SHIB 0.69%) had jumped the shark. The reference was to an infamous episode of the long-running TV show Happy Days that, in retrospect, pointed to the beginning of the program's downward slide.
I concluded that it's too soon to say that the meme coin's best days are behind it. Actually, there's a real chance that we're now seeing the start of a strong rebound that may build momentum. Here are four reasons Shiba Inu could deliver monster returns in the rest of 2022.
One of the most important factors (some might argue the most important factor) that holds the potential to drive Shiba Inu higher is the burning mechanism that's on the way. ShibaSwap 2.0 will feature a long-awaited burning portal when it launches this year.
Make no mistake about it -- burning absolutely should boost Shiba Inu's price. I don't expect the laws of supply and demand to mysteriously quit working. As the supply of tokens in circulation decreases, SHIB's price will rise.
The big question, though, is just how much of a catalyst burning will provide. Shiba Inu Discord moderator SHIBQueenie estimates that around 111 trillion tokens could be burned on an annual basis through ShibaSwap 2.0 and Shibarium (which we'll discuss later).
Burning at that rate could allow Shiba Inu to at least quintuple over a five-year period. But how much could a focused burn strategy help by the end of 2022? It depends on when the burning portal becomes available.
The SHIB Army has been hoping for a long time that Robinhood (HOOD 1.57%) would support Shiba Inu on its trading platform. Those hopes have now been fulfilled. Earlier this week, Robinhood officially announced that it was adding Shiba Inu and three other new tokens to its platform. Shiba Inu's price immediately soared on the news.
Robinhood's decision accomplished two important things. First, it provided further legitimacy to Shiba Inu, which has been maligned by some. Second, it opened the door for many investors to more conveniently purchase the token.
It's possible that Shiba Inu's surge from being added to Robinhood will only be short-lived. However, if the move leads to increased demand for the cryptocurrency, SHIB's price could continue to trend higher. The laws of supply and demand that I mentioned in reference to burning will be just as applicable if the demand for Shiba Inu rises.
There's a pretty good case to be made that the upcoming launch of Shibarium should be ranked higher on the list of potential catalysts than the addition of Shiba Inu to Robinhood. However, I think that Robinhood's decision is such a public and psychological victory for Shiba Inu that it deserved the nod as No. 2.
Shibarium is a planned layer-2 solution for the Shiba Inu ecosystem. Most importantly, it will significantly reduce the transaction fees for trading SHIB tokens. Shibarium will also feature a burning mechanism.
It's difficult to predict exactly how much the rollout of Shibarium will fuel momentum for Shiba Inu. But this launch seems likely to stir increased demand for the token.
I think that the metaverse presents a boom-or-bust kind of opportunity for Shiba Inu over the long run. It could be super successful or a total dud.
The latter scenario could be the case, even if the overall metaverse idea takes off in a huge way. Shiba Inu is one of many metaverse competitors. Some of them have big head starts and deep pocketbooks.
But do I expect that Shiba Inu's metaverse efforts could provide a catalyst in 2022? Yes. If nothing else, progress updates could keep the token in the spotlight. And if the sneak peeks at Shiba Inu's metaverse are truly impressive, this could be a big factor in helping SHIB deliver monster returns this year.
An important caveat
It's important to note that Shiba Inu's fortunes don't depend solely on the four catalysts listed above. The overall dynamics of the cryptocurrency market play a huge role in how Shiba Inu performs. Even if everything goes right with burning, Robinhood, Shibarium, and the metaverse, Shiba Inu could still fail to achieve big gains this year.