2023 was a great year for the cryptocurrency industry. The total value of all tokens in existence doubled from $850 billion to over $1.7 trillion.

But those gains weren't equally distributed. Industry leader Bitcoin (CRYPTO: BTC) soared more than 150% for the year, whereas meme token Shiba Inu (SHIB -0.38%) logged a return of just 30%. That's a far cry from Shiba Inu's 2021 gain of 43,800,000%, which could have turned a perfectly timed $3 investment into more than $1 million.

In fact, the meme token remains 88% below its all-time high, leaving many investors nursing steep losses. But with sentiment toward the crypto industry improving, could 2024 be the year Shiba Inu logs another historic gain and potentially soars from $0.00001 all the way to $1? The answer might leave your head spinning.

Investors are slowly warming up to the crypto industry again

If I came to you in 2021 -- at the height of the cryptocurrency boom -- and said the heads of the world's two largest exchanges would face criminal charges within two years, you'd probably have sold all of your tokens. Well, Sam Bankman-Fried of FTX is now behind bars, and Changpeng Zhao of Binance is awaiting trial after pleading guilty to a slew of federal charges just two months ago.

But as I touched on at the top, the industry still added significant value in 2023. Weeding out the bad actors appears to have made investors more confident about cryptocurrency as an asset class. Still, it's no consolation to the millions of creditors at FTX who are still owed over $3 billion following its collapse. Plus, the industry remains largely unregulated worldwide, meaning similar failures could happen again, leaving investors with catastrophic losses.

But some positive developments are in the works. A number of large asset managers, like Blackrock (NYSE: BLK) and Cathie Wood's Ark Investment Management, are trying to float Bitcoin exchange-traded funds (ETFs), pending approval from the Securities and Exchange Commission.

That approval is rumored to be imminent and would allow many investment professionals and financial advisors to enter the asset class officially for the first time. Not to mention, it will help legitimize Bitcoin as an investment that's here to stay.

Speculative tokens like Shiba Inu face an uncertain future

A rising tide lifts all boats, but as I mentioned, Shiba Inu's 2023 gain was lackluster. It even failed to beat the Nasdaq Composite technology index, which jumped 44% for the year. The truth is Shiba Inu has failed the adoption test and has very little utility outside the speculative corners of the crypto industry.

According to Cryptwerk, a mere 907 businesses worldwide accept Shiba Inu as payment for goods and services. Mass adoption would drive the token's value higher, but consumers have no reason to own it if they can't spend it at their favorite stores.

Plus, Shiba Inu's volatility makes cash flow management impossible. Accepting payment in a currency that could rise in value by millions of percentage points only to rapidly lose almost all that value would send most businesses to the wall.

Shiba Inu has a persistent supply problem

Its enormous supply is another barrier stopping Shiba Inu from staging another historic run. There are more than 589.3 trillion tokens in circulation, and at the current price of $0.0000107 per token, Shiba Inu has a market capitalization of $6.3 billion. Simple math suggests that if Shiba Inu rose to $1, its market cap would then be $589.3 trillion.

For context, that's more than the total wealth of every person on Earth, which stood at $454 trillion at the end of 2022, according to Credit Suisse. In other words, Shiba Inu rising to $1 is unequivocally impossible in its current state.

To solve that problem, the community is trying to shrink supply by "burning" tokens, which means to remove them from circulation forever. Shiba Inu investors can send tokens to a dead wallet or participate in other initiatives, like streaming a certain music playlist or using the Shiba Search internet search engine. The proceeds from those activities are used to further the cause.

A Shiba Inu dog sitting in front of a blank chalk board.

Image source: Getty Images.

Can enough tokens be burned in 2024 to send Shiba Inu to $1?

The community will have to burn 99.99998% of all tokens to send Shiba Inu to $1 based on its current market cap. In other words, almost all the 589.3 trillion tokens must disappear from circulation, leaving just 6.3 billion remaining.

The community has burned 34.2 billion tokens over the last 30 days. If that pace continues, over 410 billion will be removed from circulation in 2024 -- that won't be anywhere near enough to send Shiba Inu to $1 this year.

Here's the mind-blowing part: At the current pace, it would take over 1,437 years to burn all the necessary tokens. That means Shiba Inu could reach $1 in the year 3461!

But I have more bad news. Even if you lived to see that day, you wouldn't actually make any money. See, burning doesn't increase the value of Shiba Inu. It simply reduces supply and increases its price by an equal amount.

Therefore, in the year 3461, you'd simply have 99.99998% fewer tokens, except they'd be worth $1 each, meaning your net position (in dollars) would be exactly the same.