With a market cap of $12 billion, Shiba Inu (SHIB) is the 15th largest cryptocurrency by market cap. But despite its size, the iconic meme coin is down 75 percent from its all-time high it reached at the end of October. The US-based investment and consultancy giant The Motley Fool stated that the negativity in the price did not end and conveyed the developments that negatively affected the coin.
SHIB burning cannot replace growth
Shiba Inu’s developers plan to help users “burn” SHIB tokens by adding a burn portal to ShibaSwap. As cryptokoin.com also reported, burning is sending tokens to an inaccessible address to take them out of circulation, which can help increase prices by restricting supply. While the developers did not provide details, it is believed that this will be done by destroying a percentage of SHIB transaction fees on ShibaSwap.
But with 549 trillion SHIB in circulation, burning a relatively handful of coins won’t do much in reducing the asset’s over-inflated supply, according to Will Ebiefung of The Motley Fool. It is also stated by Ebiefung that if demand continues to fall at a potentially greater rate than users could destroy the tokens, the price collapse of SHIB could continue.
How will the Metaverse project affect SHIB?
Shiba Inu’s developers have rolled up their sleeves for the metaverse project. Dubbed Shiberse, the project was announced in January as an “immersive experience” for the Shiba Inu ecosystem. In February, the team provided an update introducing Shiba Lands, which will be virtual real estate in the metaverse. According to the announcement, however, Shiba Lands can be purchased with Doge Killer, which is a completely different token from SHIB.
According to the Motley Fool, this means that the metaverse will not have any fundamental impact (other than hype) on SHIB demand unless the developers incorporate SHIB into the project. The announcement further suggests that there will be an anti-dumping mechanism that could prevent investors from selling the token after purchasing it. But such a feature could undermine the credibility of the project if developers risk not being able to sell when they want, according to the expert.
Will Shiba Inu be able to remove the “meme token” stamp?
Unlike Dogecoin, Shiba Inu’s developers made a bold attempt to create use cases for SHIB. But the Shiba Inu doesn’t bring much new to the table in terms of specs, and its fundamentals are still weak, according to the consulting firm. For the above reasons, the company states, “Investors should avoid the Shiba Inu (if possible) until these challenges are resolved.”
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