Cryptocurrencies are having a rough year. The industry's most valuable coin, Bitcoin, is down 8%, but those at the highly speculative end of the market are faring even worse. Shiba Inu (SHIB +3.55%), for example, is on track to end 2025 with a loss of more than 60%.
Shiba Inu was created in 2020 by an anonymous developer named Ryoshi, who was inspired by the incredible success of the industry's original meme token, Dogecoin. Despite producing some enormous returns for its earliest investors, Shiba Inu has struggled to maintain its momentum because it lacks a true use case and, therefore, an organic source of demand.
The meme token is trading at $0.000007 as I write this, but could 2026 be the year it stages a run to the $1 milestone?
Image source: Getty Images.
Shiba Inu produced one of the greatest annual returns in history
Timing can be a powerful force in the financial markets. Shiba Inu happened to launch in the middle of a boom in the cryptocurrency industry, and hordes of speculative investors quickly latched on to the meme token. The buying frenzy fueled a return of 45,278,000% in 2021, which would have been enough to turn a perfectly timed investment of just $3 into $1 million.
But the speculative fever didn't last long, because by mid-2022, Shiba Inu had lost more than 90% of its value. Despite staging a brief rally after Donald Trump's presidential election win in November 2024, the meme token was still a long way from reclaiming its 2021 record high of $0.00009.
Only a few cryptocurrencies have genuine use cases in the real world, and Shiba Inu isn't one of them. It isn't a good payment solution because of its extreme volatility, which is why just 1,110 businesses worldwide are willing to accept it in exchange for goods and services (according to crypto directory Cryptwerk). It isn't a reliable store of value, either, considering it hasn't made a new high in more than four years.
Without an organic source of demand, investors will have to rely on another speculative frenzy to drive Shiba Inu higher, and there is no guarantee that will happen.
CRYPTO: SHIB
Key Data Points
Shiba Inu faces another glaring problem
Shiba Inu has a supply issue which might be an even bigger barrier to reaching the $1 milestone than its lack of adoption. There are 589.2 trillion coins in circulation, and based on its current price of $0.000007, Shiba Inu has a market capitalization of $4.4 billion. Therefore, a price of $1 per token would result in a market cap of $589.2 trillion.
That would make Shiba Inu more than 130 times more valuable than the world's largest company, Nvidia, which is worth $4.4 trillion. In fact, the meme token would be 10 times more valuable than all 500 companies in the S&P 500 index combined, which have a total market cap of $57 trillion. If that isn't crazy enough, Shiba Inu would be several times more valuable than the total economic output of the entire world, which was $111 trillion last year.
It's clear that reaching $1 is completely out of the question, but the Shiba Inu community is working toward a solution. Many enthusiasts are actively removing tokens from supply by burning them, which involves sending them to a dead wallet where they can never be retrieved.
In theory, the value of a Shiba Inu token should increase in proportion to the number of tokens burned. For example, if the community burns half of the circulating supply, the price per token should double, so this creates a real pathway to the $1 milestone.
Burning enough coins will take a mind-blowing amount of time
To warrant a price of $1 per coin, the Shiba Inu community would have to burn 99.99998% of the 589.2 trillion coins outstanding, leaving just 4.4 billion remaining. Shiba Inu's market cap would stay exactly where it is today ($4.4 billion), so no additional value would have to be created. This means nobody has to invent a new use case or create an organic source of demand to drive the token higher.
But this pathway also has a problem. Since no real value would be created, nobody would make any money -- even though each token would be worth $1, every investor would own 99.99998% fewer tokens, canceling out any financial gains.
Not to mention, it would take a ludicrous amount of time to burn the required number of tokens. The community burned just 163 million coins last month, translating to an annualized rate of 1.9 billion coins. It would take a mind-blowing 310,105 years to eliminate enough supply to justify a price of $1 at the current pace, so we certainly won't be here when it happens.
But even if Shiba Inu investors discovered a way to live forever, 300 millennia of inflation would leave them significantly worse off.
