Shiba Inu (SHIB 2.38%) has seen its better days. The once high-flying meme coin has fallen more than 20% over the past month. It's down nearly 40% year to date. And Shiba Inu is more than 76% below its high set in late October 2021.
Some might be skeptical about what's ahead for the beaten-down cryptocurrency. But will May be the month for Shiba Inu to roar back?
Image source: Getty Images.
Most likely catalysts
Even the most ardent critic of Shiba Inu would probably acknowledge that it has some potential catalysts on the way. There are three, in particular, that seem most likely to spark a rebound.
A portal for burning tokens is now available on the ShibaSwap exchange. At one point, the general consensus was that this burn portal wouldn't be available until version 2.0 of ShibaSwap was launched. However, SHIB owners now have full access to burn their tokens and receive Ryoshis Vision tokens as rewards.
As SHIB tokens are burned on ShibaSwap, they're removed from circulation. The more this happens, the higher the value should be for the remaining tokens in circulation.
The highly anticipated launch of the Shibarium layer-2 solution could also light a fire beneath Shiba Inu's price. Shibarium will also feature a burning mechanism. Perhaps most importantly, though, it should result in much lower transaction fees.
Shibarium will also serve as the foundation for the third potential catalyst -- the Shiba Inu metaverse. Virtual land is already available for purchase in this metaverse. It's possible that sneak peeks at what's in store could cause Shiba Inu's price to rise even before the metaverse officially launches.
Key problems
There are several key problems with the rosy scenario envisioned with these three potential catalysts, though. Let's start with the obvious one: Burning on ShibaSwap hasn't driven Shiba Inu's price higher so far. The new feature launched on April 23, 2022. Since then, Shiba Inu's price has fallen instead of moving higher.
Shibarium could help. However, the exact launch date for the layer-2 solution isn't known. Although there has been some talk that Shibarium would roll out in the first half of 2022, there's no guarantee that it will do so in time to serve as a catalyst in May.
The first phase of buying virtual land in the Shiba Inu metaverse began in early April. While this should be viewed as a significant milestone, it didn't cause the price of SHIB tokens to increase at all. One big reason why is that the purchases had to be made using Ether tokens rather than Shiba Inu tokens.
But the biggest problem of all for Shiba Inu is the bleak situation for cryptocurrencies, in general. Investors have scrambled to safer assets, leaving riskier ones in the cold. This shift has resulted in prices falling for most digital tokens and growth stocks as well.
What do May flowers bring?
All of this reminds me of the old joke, "If April showers bring May flowers, what do May flowers bring?" The answer, of course, is pilgrims.
At this point, May flowers seem unlikely to bring a huge rebound for Shiba Inu. However, this month could be a stepping stone to a brighter future for the digital token.
Increased burning that's now available on ShibaSwap could make a difference over the long run. The development that's being done in May on Shibarium and the Shiba Inu metaverse could lead to gains for the cryptocurrency down the road. And perhaps the risk-off environment will ease somewhat this month.
What do May flowers bring for Shiba Inu? Probably the best answer, for now, is maybes.
