The Shiba Inu (CRYPTO:SHIB) cryptocurrency stands as the most explosive and unlikely investment winner of 2021. The token’s price soared more than 44,600,000% during the past year, and some investors are betting that its run is just getting started.
If you’ve been tracking the SHIB token closely and scanning the internet for news and analysis related to the meme cryptocurrency, you might have seen debate and speculation about whether its price can hit the $1 mark. That’s a very long way from its recent price of about $0.000034 per token, which means that reaching $1 would require additional growth of more than 2,940,000%. Could this really happen?
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Let’s get real
If Shiba Inu manages to rise to $1, that implies that a $1,000 investment in SHIB at current prices would make you a millionaire nearly 30 times over. So again, the question is whether there is any realistic chance of this occurring? While anything technically may be possible, the answer is an emphatic “No” — SHIB, one of two meme coins that use a Shiba Inu dog in their logos, will never come close to $1.
In some ways, it’s not hard to see why speculation about the SHIB token reaching the $1 mark keeps popping up. After all, the token has grown at an incredible clip, and $1 is a nice, round target that’s easy to conceptualize. If SHIB can grow more than 44,600,000% inside of a year, what’s to stop it from growing another few million percent?
SHIB has admittedly proven doubters wrong again and again, but the nature of scale means the odds are exceedingly slim that it can ever reach the $1 price point at its current coin count. At its current price, Shiba Inu has a market capitalization of roughly $19 billion. For comparison, Bitcoin (CRYPTO:BTC) is the largest cryptocurrency by far, and it has a market capitalization of about $900 billion.
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With a total supply of nearly 590 trillion SHIB coins, hitting the $1 price point would result in a market capitalization just short of $590 trillion. Reaching $1 per token would mean that SHIB’s market capitalization would be roughly 650 times the market cap of Bitcoin. For another point of comparison, at $1, SHIB’s market cap would be more than six times the total projected global gross domestic product in 2021.
Outside of the extremely unlikely scenario in which the U.S. dollar and other fiat currencies lose most of their value and investors flock to SHIB as an alternative, it’s simply implausible that the token will ever reach $1. Investors should regard any statements to the contrary with suspicion and not take those sources into consideration when making their investment decisions.
However, just because it looks virtually impossible for SHIB to reach $1 doesn’t necessarily mean the price won’t climb significantly higher than current levels.
What could send SHIB higher?
Although networks such as Ethereum and Solana have cryptocurrencies that are used to transact on their respective blockchains and the underlying services provide some level of fundamental value for the tokens, the dynamic for SHIB is much less complicated. SHIB can be used as a currency or a speculative investment vehicle. That means that simple adoption and price speculation are the main price drivers for the token.
If Robinhood Markets and other leading trading platforms make Shiba Inu available to buy and sell, that could help spur adoption for the token and drive up its price. The token is also attracting some interest as a cryptocurrency used as a payment method for buying and selling in metaverse virtual-world applications.
On the speculation side of things, another strong bullish phase for the broader cryptocurrency market would likely benefit SHIB’s valuation. And if a huge number of tokens were burned, thereby reducing the total coin count, that could also help drive SHIB’s token price higher.
Shiba Inu looks incredibly risky, and it’s probably best to think of any money put into the coin as more of a gamble than an investment. However, SHIB has managed to defy expectations before, and there are still some potential catalysts that could help spur significant price gains.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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