Shiba Inu (SHIB 0.41%) soared a mind-boggling 45,000,000% last year, mainly due to support from fans known as the Shib Army and hope that this young cryptocurrency would take off. But even with such an enormous gain, Shiba Inu's price remains at a fraction of a cent.
What could lift Shiba Inu from this point? Well, two huge catalysts lie ahead. I'm talking about launches of a layer-2 scaling solution and a metaverse project. If Shiba Inu ever had reason to climb, it's now. But are these two elements enough to help Shiba Inu reach the level of one cent? Let's find out.
"Spontaneous community building"
First, a little background on this popular meme token. Shiba Inu, as you might have guessed by now, is named after a Japanese dog breed. It's no surprise the Shib Army has driven gains. After all, Shiba Inu was created as "an experiment in decentralized spontaneous community building," according to the cryptocurrency's whitepaper.
Shiba Inu isn't a blockchain like bigger player Ethereum, for example. Instead, it's a token that runs on the Ethereum network. That's held it back when it comes to real-world utility and innovation. Shiba Inu's uses are pretty much limited to payment and staking. But change may be in the air.
Here's what's up next for Shiba Inu. Developers may soon be ready to launch Shibarium, a layer-2 solution. The goal of this is to ease the problems associated with operating on Ethereum. Shibarium promises higher transaction volume, faster transactions, and lower fees. This is a crucial step if Shiba Inu aims to attract more investors and users.
At the same time, Shiba Inu also is rolling out its very own metaverse. Shiba Inu is selling more than 100,000 plots of land there. It's already made some available -- the rest will release in phases. Once you own land, you can earn passive income and gain rewards and assets in the metaverse.
Burning to reduce supply
Both Shibarium and the metaverse will include burn mechanisms. And speaking of coin burning, Shiba Inu launched a burn portal earlier this spring. Burning is the way to reduce Shiba Inu's circulating supply -- today it stands at 549 trillion tokens. And reducing supply is key to increasing the value of each individual token.
So, now let's get back to our question. Could these catalysts push Shiba Inu to one cent? We know this crypto player posted a tremendous gain last year -- and that happened without such major catalysts. But before we get too excited about the possibilities, it's important to look at two points. First, even with Shibarium and the metaverse, Shiba Inu doesn't stand out from rivals. It doesn't offer something different from the others. So, it's hard to justify a major increase from that perspective.
Now, let's look at the math perspective. Today, if Shiba Inu tokens were worth one cent, the cryptocurrency would boast a market value of $5.4 trillion. That's five times more than the entire cryptocurrency market. The market recently fell below $1 trillion for the first time since early last year. Coin burns could help Shiba Inu. But to bring supply down to even 999 billion tokens, you would have to burn 99% of today's supply.
All of this means it doesn't look like Shiba Inu is heading for one cent anytime soon. And that puts a big limit on potential gains and overall future prospects for this cryptocurrency player.