A crypto investor’s dream is to turn a small investment into a fortune. Think turning $20 into $250,000. It has happened on this and even larger scales. Shiba Inu (SHIB) launched in 2021 with high hopes. Unfortunately, a large majority of SHIB holders are facing losses rather than gains.
At the time of writing, one SHIB token is priced at $0.00001. This is 68.61% less than the asset’s record high of $0.000032. Yet Shiba Inu has a fiercely loyal following that is optimistic this dog will have its day.
Let’s take a look at when that day might come. SHIB enthusiasts would be elated to see the token reach $1 per unit. This would mean a whopping 999,900% price increase, and holders are wondering if burning units could be the answer.
For those unfamiliar with this term, burning crypto is akin to a stock buyback. It is a process that removes digital assets from circulation. The goal is to reduce the supply of a coin or token to increase its demand.
This is not an overnight process. In fact, it could take 25 years to burn SHIB to the $1 price point. And this is not a when, but an if as there is no guarantee the token will ever reach this value.
The process would consist of burning off 90% of SHIB units. This would still leave $100 trillion of the currency in circulation. As SHIB has a current market cap of $5.7 billion, a few more years would need to be added to the initial 25 to reduce the supply to a few billion tokens.
This time frame is based on the token’s current (October) pricing. In July, it was estimated that 90% of SHIB would only take 10 years to burn due to the activity seen in the summer. Developers realize that in order for SHIB to keep up with the big dogs, they need to incentivize holders to burn tokens.
This was fairly commonplace when the token launched. Projects were later set up that would allow investors to burn SHIB units and be rewarded with passive income streams. In September, $17,500 worth of SHIB was burned. This breaks down to 1,750,000,000 units, which might seem like a mind-boggling number, but in the past 18 months, only 0.2% of the SHIB supply has been burned.
Since its market debut, 41% of the initial SHIB supply has been burned. However, Vitalik Buterin was responsible for most of this amount when he destroyed 90% of his holdings in May of 2021. At the time, that single transaction was valued at $6.7 billion and consisted of more than 410 trillion SHIB units.