Crypto Crash: Can the Shiba Inu Hit $1 in 2023?

Crypto Crash: Can the Shiba Inu Hit $1 in 2023?

If 2021 was the next party for the cryptocurrency industry, then 2022 was a bad hangover. Last year, the total value of all cryptocurrencies exceeded $2.9 trillion, but that number is down to just $800 billion as of this writing.

shiba inu (gray 0.87%) He was a star in the rise of the cryptocurrency industry, posting a historic annual return of 43,800,000% in 2021. But that enthusiasm has evaporated with the token losing 74% of its value in 2022 so far.

Many investors would say that this is proof that the Shiba Inu was just a vehicle for speculation, but can the token find new use cases to increase its value? If so, could another meteoric rise be in the cards, from its current price of $0.000008 to $1 next year?

Faith in cryptocurrency has fallen

A series of high-profile cryptocurrency crashes this year has eroded investor confidence even in tokens like bitcoin And the Ethereumwhich have each fallen more than 75% from their all-time highs.

The latest casualty was one of the world’s largest cryptocurrency exchanges, FTX, which filed for Chapter 11 bankruptcy in stunning fashion earlier in November. At this point, the company appears to owe its creditors (mostly its users) at least $3 billion, and it is unlikely that any of these account holders will ever see all of their money back.

But FTX has followed several other colossal failures including Three Arrows Capital, a crypto hedge fund that once managed $10 billion. It filed for bankruptcy in July and set off a series of spillover effects that brought down Voyager Digital, a crypto brokerage that had loaned Three Arrows up to $670 million it couldn’t recover.

However, those stories pale in comparison to the failures TerraUSD stablecoinwhich wiped out an estimated $60 billion in value at the time It pegged its currency to the US dollar again in May.

All of these disasters have one thing in common: every day Cryptocurrency Investors were prone to losing the most money, which is something government regulations tend to prevent in traditional financing. It is unclear how likely these investors are to return to the cryptocurrency markets in the future.

The Shiba Inu faces a series of other challenges

The broader turmoil in the cryptocurrency market has certainly affected the Shiba Inu. The token was trading at $0.000014 just a month ago, so it has lost about 40% of its value since the FTX scandal was revealed. But the Shiba Inu does not seem to be gaining traction as a payment mechanism despite the best efforts of its community, which means that ordinary consumers have no reason to buy the tokens.

Currently, only 659 merchants accept the token as payment for goods and services, and if that number fails to grow appreciably, the Shiba Inu will be doomed to remain on the fringes of the financial world.

Shiba Inu developers are now building new technologies like the full metaverse to help give the token some utility. The Shiba Inu hasn’t been posted yet, but a few new concept images have been released this month, causing some buzz across social media. When it eventually launches, owners of virtual lands within the Digital World will be able to rename their plots of land by paying a fee in Shiba Inu tokens.

These tokens will be burned – or removed from circulation forever – which will result in an organic and proportionate increase in the price of each Shiba Inu token. The burn mechanism is a feature of several Shiba Inu-themed projects, including the Shiba Coffee Company, which aims to reduce the massive 589 trillion unit token supply.

Image source: Getty Images.

Burning is the only way for a Shiba Inu to get a dollar

With 589 trillion tokens in circulation, a price of $1 per token means the total value of the Shiba Inu will rise to $589 trillion, making it the most valuable asset on Earth by a large margin. Unfortunately, even the most bullish of punters don’t think this is realistic, and so, the only way to get to that price is to reduce supply.

It is unlikely that novelties like the metaverse would result in a 99.99998% drop in supply that a Shiba Inu would need to send the price mathematically to $1. Nor will we count on the community’s generosity to send their tokens to dead wallets to remove them from circulation.

In fact, only 30 million tokens have been burned in the last 24 hours (as of this writing). If this pace remains constant, only 10.9 billion tokens will be burned each year, meaning that it would take over 64,000 years to reduce the supply enough for the Shiba Inu to reach $1. So it is

Therefore, investors hoping to see the Shiba Inu rise to $1 in 2023 — or in that lifetime — will likely be disappointed. The burn rate would need to be accelerated by an enormous amount to make this happen.

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