The Shiba Inu (SHIB) lost 74% of its values in 2022 after posting a historic return in 2021. Investors’ faith in crypto markets has plummeted after a series of high-profile crashes across the industry. According to crypto expert Anthony Di Pizio, SHIB is facing a major mathematical hurdle to reach $1. The expert both interprets the market and explains why SHIB cannot be 1 dollar.
Times of rise and fall in crypto!
If 2021 is the exit party for the crypto industry, then 2022 is a bad hangover. Last year, the combined value of all cryptocurrencies exceeded $2.9 trillion. However, as you follow on Kriptokoin.com, this figure is now only $800 billion. The Shiba Inu (SHIB) posted a historic one-year return of 43.8 million% in 2021. Thus, he was the star of the rise of the crypto industry. However, that enthusiasm has evaporated as the token has lost 74% of its value since 2022.
Many investors will say this is proof that the Shiba Inu is just a speculation tool. But can it find new use cases that will potentially increase the token’s value? If so, is another meteoric rise from current $0.000008 to $1 next year possible?
Belief in cryptocurrency has waned
There have been a number of high-profile crypto crashes this year. This has eroded investors’ faith in leading tokens such as Bitcoin and Ethereum, each of which has seen a price drop of over 75% from all-time highs. The most recent loss was FTX, one of the largest cryptocurrency exchanges in the world. At this stage, the company appears to owe at least $3 billion to its creditors. Also, it is unlikely that any of these account holders will ever see all of their money again.
But FTX has followed suit with several other major failures, including Three Arrows Capital, a crypto hedge fund that once managed $10 billion. 3A Capital filed for bankruptcy in July. It triggered a series of on-chain effects that knocked out Voyager Digital, a crypto brokerage firm that lent the Three Arrows $670 million that it could not redeem. However, these stories pale in comparison to the failure of the TerraUSD stablecoin, which wiped out an estimated $60 billion when it lost its pegged to the US dollar in May.
All these disasters have one thing in common. Daily cryptocurrency traders were losing the most money. And that’s something that government regulations tend to thwart in traditional finance. It is unclear how likely these investors are to return to the crypto markets in the future.
The Shiba Inu (SHIB) faces a host of other challenges
The wider crypto market turmoil has certainly affected the Shiba Inu. The token was trading at $0.000014 just a month ago. So since the FTX scandal broke out, it has lost about 40% of its value. However, SHIB is failing to gain traction as a payment mechanism, despite the best efforts of its community. This means everyday consumers have little reason to buy SHIB.
Currently, only 659 traders accept the token as payment for goods and services. Unless that number increases significantly, the fate of the Shiba Inu will be doomed to stay on the fringes of the financial world. Shiba Inu developers are now developing new technologies such as a complete metaverse to help bring some utility to the token. Metaverse is not live yet. However, the team released some new concept images this month that caused some excitement on social media. When finally released, virtual landowners in the digital world will be able to rename their land by paying a fee in SHIB tokens.
These tokens will be burned. This will result in an organic, proportional increase in the price of SHIB. The burning mechanism is a feature of many Shiba Inu-themed projects, including the Shiba Coffee Company, which aims to reduce the token’s massive supply of 589 trillion units.
Incineration is the only way to $1 for SHIB
With 589 trillion tokens in circulation, a $1 price means that the total value of the Shiba Inu will rise to $589 trillion, making it by far the most valuable asset in the world. Unfortunately, even the most optimistic bookies do not believe this to be realistic. Therefore, the only way to reach this price is to reduce the supply.
On the other hand, innovations like the metaverse are unlikely to result in a 99.99998% drop in supply. The Shiba Inu should mathematically post the price of $1. Nor will he rely on the community’s generosity to send their tokens to dead wallets to remove them from circulation.
In fact, only 30 million tokens have gone to the burn wallet in the last 24 hours. If this rate remains constant, only 10.9 billion tokens will be burned each year. So it will take more than 64,000 years to reduce enough supply for the Shiba Inu to reach $1. Therefore, investors hoping to see the Shiba Inu rise to $1 in 2023 or this lifetime will likely be disappointed. For this to happen, the rate of combustion must be accelerated by an extreme amount.
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