Can SHIB reach $1?

But the meme token Shiba Inu (SHIB 1.57%), which stole the show from other cryptocurrencies in 2021 with an impressive return of 43,800,000%, has tripled since its 2022 low of 0.000006. $ to trade at $0.000018. But is it on track to meet many investors’ long-term goal of $1?

Cryptocurrency markets are under increased scrutiny

Concerns about the cryptocurrency sector have increased over the course of 2022, which partly explains the widespread decline in its value. It’s no longer just government regulators asking the tough questions, but also consumers amid a handful of spectacular failures this year that have left catastrophic losses in their wake.

The collapse of stablecoin TerraUSD was one of the most notable, wiping out almost all of its $18 billion peak value. Then, in July, decentralized cryptocurrency lender Celsius filed for bankruptcy, owing an estimated $4.7 billion to its users. That same month, Voyager went bankrupt after providing loans to cryptocurrency hedge funds like Three Arrows, which failed in part because that entity lost a big bet on the TerraUSD stablecoin.

Now, US government agencies seem to be taking a much more proactive approach to regulating the crypto industry. A wave of new rules are about to emerge to better protect consumers. Many crypto tokens will likely be classified as securities in the future, subjecting them to strict guidelines on how they are offered, sold, and traded. Exchanges and brokerage firms that process these tokens will also have to adhere to new auditing and compliance standards.

A token would be classified as a security if it passes the Howey test, which dates back to a 1946 Supreme Court ruling defining investment contracts. In other words, if investors are pooling their money in a project by buying stocks, contracts or, in this case, tokens, in the obvious expectation of making a profit, it is likely that this instrument financial or a transferable security in the eyes of the law. It seems Shiba Inu fits that definition, at least at face value.

Shiba Inu offer keeps burning

Beyond an overhaul of the cryptocurrency regulatory framework, the Shiba Inu faces a unique problem that prevents it from making stratospheric gains similar to those of 2021. There are currently 589 trillion Shiba Inu tokens in circulation, which means that if the price per token reaches $1, it would make Shiba Inu the most valuable asset on Earth, hands down. In other words, it will never happen.

To pave a more realistic path to $1, the community is working together to burn the tokens, which means taking them out of circulation forever. There are several ways to do this, including participating in the new Shiba Inu Metaverse, where virtual landowners can uniquely name their plots in exchange for a fee paid in Shiba Inu tokens, all of which will be burned.

Enthusiasts can also help out by listening to a specific music playlist, or even buying coffee from the Shiba Coffee Company, which burns some of its profits. But the easiest way to burn tokens is to send them to a dead wallet, where they will remain inaccessible forever.

But there is a catch…or two.

The math behind the combustion strategy is simple. If 90% of the 589 trillion Shiba Inu tokens in circulation are burned, the price per token will organically increase tenfold (in theory). Therefore, to reach a price of $1, approximately 99.9998% of the tokens would need to be burned.

At the current rate of daily burning, it would take more than 10,000 years to achieve this. But that’s just one problem. The other issue is that if Shiba Inu reaches $1, it won’t change the underlying value of each investor’s position – it just means each investor will have 99.9998% fewer chips, each worth $1, the leaving mathematically in the same position as before the massive combustion.

There is only one way to increase the value of Shiba Inu, and that is to find use cases for the token that will lead to widespread consumer and business adoption. Currently, only 659 mostly obscure merchants accept Shiba Inu as payment worldwide, and that’s not enough to shake things up.

Unfortunately, it seems that the dream scenario of one dollar per token remains out of reach for Shiba Inu investors for now.

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