- Shiba Inu (SHIB) has the confidence of influential whales.
- The company continues to burn tokens to increase value.
- Investors need to wait for increased utility before making a move.
Shiba Inu (SHIB-USD) has a few catalysts behind it that should propel its price upward in the short term. Those catalysts include the activity of so-called “whales” and the continued burning of the token.
That may seem attractive to bullish pundits who continue to wish and hope SHIB will reach $1 in the future. That simply isn’t going to happen without a massive increase in the rate at which tokens are burned. Even then, it’s highly questionable.
| SHIB-USD | Shiba Inu | $0.00002716 |
Whale Watch
At least one so-called whale is very optimistic about Shiba Inu’s chances of appreciating in price. That anonymous power player has very recently purchased more than 200 billion of the token per Etherscan.
That individual paid nearly $5 million for this transaction. While that may seem like a lot of money, a much larger transaction took place just days earlier by the same whale.
That transaction netted the individual more than 3.7 trillion Shiba Inu tokens. That brings their holding to 3.914 trillion total tokens. That equates to a market capitalization of $97.85 million in SHIB owned by that particular whale.
The point here is that such a large purchase inspires confidence down the food chain. Less well-heeled retail investors are led to believe Shiba Inu should rise. Otherwise, why would someone be willing to risk so much capital?
Indeed, SHIB has been rising over the last week. On top of that, more and more tokens continue to be burned.
Continued Burn Off in Shiba Inu
263 billion SHIB tokens have been burned since October. The rate at which the tokens are being burned may also be increasing, as it was reported that 2 billion tokens were burned in the 24 hours by March 23.
Potential investors should remember 1 quadrillion SHIB tokens were originally minted. Roughly half were locked in smart contracts for the sake of liquidity. The other half were given to Ethereum (ETH-USD) founder Vitalik Buterin, who then burned 410 billion. According to CoinMarketCap, there are currently more than 549 billion Shiba Inu tokens in circulation.
The more tokens that are burned, the more valuable the remaining tokens become based on the law of supply and demand. Say what you will about Shiba Inu’s lack of utility, but in the short term, this news is bullish.
The cryptocurrency market is highly volatile and highly speculative. This is certainly the kind of news investors could seize upon, thus raising the demand for SHIB.
Don’t Get Overzealous
Both of the preceding catalysts are positive for Shiba Inu. Either or both could gain traction and cause retail investors to begin conversations about SHIB. That could easily lead to a situation where capital flows in at increasing rates, thus raising prices.
Just don’t expect the token to miraculously jack prices up to $1, as some speculators have suggested. That’s simply not possible. If you don’t believe me, read this article I recently wrote about the math behind such a price.
Shiba Inu needs to work toward two goals simultaneously for its price to rise over the long term. It needs to keep burning tokens so the remaining ones become more valuable and increase its utility. The problem is Shiba Inu doesn’t have much utility right now.
What to Do With Shiba Inu
There are a few short-term catalysts in play for Shiba Inu currently. Those will encourage bullish investors. But the long-term questions still linger for the token.
The most important one has always been about utility. That’s what investors should really be concerned about. Everything else is relatively unimportant.
All cryptocurrency is currency. And what matters with currency is what it is worth and where you can use it. Shiba Inu isn’t worth much, and you can’t use it many places. Short-term catalysts are in place, but long-term catalysts remain to be seen.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
