Shiba Inu (SHIB 1.20%) was the talk of the crypto world a couple years ago, as it skyrocketed in 2021, hitting an all-time high price of $0.00008845 in October that year. But as of this writing, the token is 88% off that peak, a clear sign that investors have soured on the dog-inspired digital asset.
Shiba Inu bulls aren't deterred, however, thinking that its best days are still ahead. Can Shiba Inu one day reach $1 per token, which would equate to a rise of more than 111,000-fold? Speculators might hope for this lofty target to come true, but it's not probable. Let's take a closer look at this meme cryptocurrency.
Lack of adoption
While cryptocurrencies have loud believers, as well as fervent skeptics, what ultimately matters for their long-term viability is if more users adopt the technology in their daily lives. The thinking is that as more people use a particular cryptocurrency, demand rises, and so too should its price.
But Shiba Inu's major price run-up in 2021 was due mainly to speculative forces, driven by meme-stock mania that took hold of the markets at that time. In other words, Shiba Inu isn't gaining supporters because it has any valuable use cases.
The network is built on top of Ethereum's, so it opens up greater compatibility than its rival, Dogecoin. This gives Shiba Inu the ability to create and run smart contracts, which are just software programs that automatically execute when two parties satisfy their ends of a transaction. But according to cryptwerk.com, Shiba Inu is only accepted as a form of payment by 766 merchants worldwide.
CRYPTO: SHIB
Key Data Points
Shiba Inu is trying to improve its standing. There is ShibaSwap, a decentralized exchange that lets people trade various digital assets without the need for a central authority. There's also a project called Shibarium on tap, which is a Layer-2 network that could help Shiba Inu process transactions faster and more cheaply, thus opening up use cases for things like non-fungible tokens, metaverse applications, and decentralized finance protocols. It's still unknown when this will be released.
The Shibarium project poses a lot of technical risk, as lots of things can go wrong with its implementation. Moreover, users and developers simply might not care enough to direct their attention and time to these updates. And this highlights the fact that Shiba Inu lacks any competitive edge. In a world where there are tens of thousands of different cryptocurrencies, investors are probably better off just focusing on the proven giants, like Bitcoin and Ethereum.
The numbers don't add up
If the downbeat outlook on Shiba Inu's challenges isn't enough for you to be bearish on the digital asset, an illuminating exercise is to just do the math. There are 589 trillion Shiba Inu tokens in circulation. That's down from the initial supply of 1 quadrillion, but it's nonetheless an astronomical figure. This means that if Shiba Inu can miraculously reach $1 per token, the entire network's market cap would total $589 trillion. That silly nominal sum isn't happening, even with a strategy in place to burn coins, taking them out of circulation.
At this monster valuation, Shiba Inu would command many times more than all of the world's net worth. It would be roughly 25 times the size of the U.S. economy in terms of gross domestic product. And it equates to about 210 times more than the world' most valuable company, Apple. Is it in the realm of possibilities that this speculative cryptocurrency surpasses the most successful enterprise of our time? There's not a chance.
Investors hoping that Shiba Inu can hit the $1 mark should seriously temper their expectations. This token isn't going to get there. The numbers just don't add up.
