The Shiba Inu (SHIB +2.58%) cryptocurrency was created in 2020 by an anonymous developer named Ryoshi, who wanted to ride the success of the industry's original meme token, Dogecoin, which was soaring in value at the time. It worked out better than anybody could have predicted -- at least at first.
Had you bought Shiba Inu on Jan. 1, 2021 and sold it at the end of that year, you would have earned a mind-boggling return of 45,278,000%, which would have been enough to turn an investment of just $3 into over $1 million. The rally was fueled entirely by speculative investors, so a dramatic ending was almost inevitable. The token wound up losing more than 90% of its value by mid-2022.
A single Shiba Inu token trades for around $0.000008 as I write this, so it would have to soar by 12,500,000% to reach the $1 milestone that's long been the goal of the meme token's biggest supporters. We know Shiba Inu is certainly capable of producing a return like that, so could it happen in 2026? The answer will blow your mind.
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Shiba Inu is struggling to create sustainable value
So far, we've seen cryptocurrencies create value in a few different ways. Some have unique use cases, like XRP, which is a bridge currency in the Ripple Payments network. Then there is Bitcoin, which is considered a store of value by investors, kind of like a digital version of gold. Stablecoins like Tether, on the other hand, have become popular in transactions because they can move money around the world instantly.
Shiba Inu doesn't really fit into any of those categories, which means it lacks an organic source of demand capable of driving upside in its price. Its extreme volatility rules it out as a good payment mechanism, because any consumer or business holding tokens will run the risk of steep losses. Plus, since it hasn't reached a new record high since 2021 and continues to trend lower, it can't be considered a good store of value.
Developers have tried to create demand through initiatives like the Shiba Inu metaverse, where tokens have some utility. However, the effect has been limited so far, with no noticeable effect on the price per token.
A supply problem could be the biggest barrier to further upside
There are 589.2 trillion Shiba Inu tokens in circulation. At the current price of $0.000008 per token, the ecosystem has a market capitalization of $4.8 billion. Simple math suggests that a price of $1 per token would catapult Shiba Inu's market cap to $589.2 trillion, which no amount of demand or adoption could possibly justify.
This scenario would make Shiba Inu five times more valuable than the annual output of the entire global economy, which was $111 trillion last year. The meme token would also be worth 10 times more than the combined value of all 500 companies in the S&P 500, which stands at around $57 trillion.
CRYPTO: SHIB
Key Data Points
Obviously, reaching $1 per token is completely unrealistic as things stand. But the Shiba Inu community is trying to reduce supply by "burning" tokens, which involves sending them to a dead wallet where they can never be retrieved, thus removing them from circulation forever. In theory, the price per Shiba Inu token should increase in proportion to the number of tokens burned, carving a legitimate pathway to $1.
It will take a mind-blowing amount of time to burn enough tokens
The surest way for Shiba Inu to reach $1 per token would be to burn 99.99998% of the 589.2 trillion tokens in circulation, leaving just 4.8 billion tokens remaining. In that scenario, Shiba Inu's market capitalization would remain exactly where it is today ($4.8 billion), so no additional value needs to be created.
But since Shiba Inu's market cap wouldn't change and no value would be created, it also means that nobody would make any money. Even though each token would be worth $1, each investor would have 99.99998% fewer tokens, canceling out any gains.
Plus, it would take a mind-blowing amount of time to burn enough tokens. Last month, the Shiba Inu community burned just 94.2 million tokens, translating to an annualized rate of 1.13 billion tokens. At the current pace, it would take 521,415 years to eliminate enough tokens to justify a price of $1, so none of us will be here when the milestone is achieved.
Even if you passed your tokens down through enough generations, 500 millennia worth of inflation would leave your descendants significantly worse off.
