Will Another Vitalik Buterin-Like Shiba Inu (SHIB) Burn Event Push It to New ATHs?

Shiba Inu (SHIB) has captured the attention of retail investors. However, its price has fallen significantly since its all-time high (ATH) of $0.00008845 in October 2021.

Shiba Inu (SHIB) has garnered immense attention from retail investors. However, after reaching an all-time high (ATH) of $0.00008845 in October 2021, the token has experienced a significant downturn. Currently trading at around $0.00001388, SHIB is over 84.3% lower than its peak.

Several factors influence the Shiba Inu (SHIB) price. The broader cryptocurrency market, especially the price trends of Bitcoin (BTC), have a strong impact on SHIB's value. When Bitcoin experiences price movements, SHIB often follows a similar trajectory.

In addition to market forces, unique aspects of SHIB's tokenomics also affect its price. One key factor is token burns, which permanently remove SHIB tokens from circulation. The theory is that reducing supply with consistent demand can drive the price up.

The most significant burn event in SHIB's history occurred in May 2021, when a massive 410 trillion SHIB tokens (over 41% of the total supply at the time) were sent by Ethereum co-founder Vitalik Buterin to a burn wallet. This burn coincided with an existing uptrend for SHIB, and some argue that it helped propel the momentum, leading to the ATH in October 2021.

The Shiba Inu community has continued burning tokens, but at a slower pace compared to Buterin's contribution. What if another large-scale burn, similar to Buterin's, were to occur?

Shiba Inu (SHIB) has a circulating supply of approximately 589 trillion tokens and a market capitalization of $8.2 billion. If another 410 trillion SHIB were burned, the circulating supply would decrease dramatically to around 179 trillion. This substantial supply reduction would likely affect SHIB's price, but the precise outcome depends on the market cap's response.

There are two main scenarios to consider:

Firstly, if the market cap increases proportionally to the decrease in circulating supply, the new price would be calculated by dividing the old supply (589 trillion) by the new supply (179 trillion), which would be equal to the ratio of 3.29.

Then, multiply the current market cap ($8.2 billion) by 3.29. The new market cap will be $27 billion. This will result in a new price per SHIB token of $0.000151, a 987% increase from the current price.

Secondly, the market cap remains at $8.2 billion despite the burn. With a reduced supply of 179 trillion, this will reflect a price increase, but it wouldn't surpass the ATH.

SHIB burns can impact price, but the overall effect depends on the market cap response. A proportional market cap increase could push SHIB to new heights, while a stagnant market cap would lead to a smaller price increase. It’s important to note that the cryptocurrency market is inherently volatile and largely unpredictable.

The above is the detailed content of Will Another Vitalik Buterin-Like Shiba Inu (SHIB) Burn Event Push It to New ATHs?. For more information, please follow other related articles on the PHP Chinese website!