SHIB, which exists as an ERC-20 token on the Ethereum blockchain, has over 1.2 million holders. Much of SHIB’s popularity is due to its status as a meme currency, as its holders often promote it on various social media platforms through memes and viral campaigns.
However, SHIB has not escaped the cryptocurrency bear market of 2022. After hitting an all-time high in October 2021, the token experienced an intense bear phase that saw the price of SHIB fall 87% below its all-time high. When SHIB was on the rise, many token holders wondered if Shiba Inu would reach 1 cent. This has been a target even in a bull market and is now highly unlikely.
In this article, we are going to discuss whether SHIB can reach the penny. But before we start, let’s take a quick look at the history of the Shiba Inu project and its path to the top of the cryptocurrency markets.
Shiba Inu is a meme currency that went from nothing to billions of dollars
The Shiba Inu was launched in August 2020 with little fanfare. The token was advertised as an alternative to Dogecoin and was sometimes referred to as the “Dogecoin killer”. Unlike Dogecoin, which has its own blockchain, SHIB is issued on the Ethereum blockchain. This gives it many more potential use cases as the token can be easily deployed in decentralized finance applications.
The creator of the Shiba Inu is known under the pseudonym Ryoshi. Another important figure in the Shiba Inu project is Shitoshi Kusama, lead developer.
SHIB remained largely unknown for approximately six months after its inception. Until 2021, its trading volume was extremely low, under $1,000 on most days. Ironically, the catalyst that brought attention to the Shiba Inu was Dogecoin, which was supposed to replace the Shiba Inu. The massive rise in the price of Dogecoin in early 2021 prompted speculators to look for the “next Dogecoin” and the market chose the Shiba Inu as the top contender.
Will the Shiba Inu reach 1 cent?
So, will the Shiba Inu reach 1 cent? It will be very difficult, to put it mildly. Even during SHIB’s all-time high in October 2021, when the token was trading at $0.0000881, SHIB would have had to increase its price 113 times to reach the price of $0.01.
While SHIB has seen significant price increases in the past, the likelihood of reaching significant multiples decreases as the asset’s market capitalization increases. For example, it would not be so wild to say that a cryptocurrency with a $10 million market cap could potentially increase its price by 100 times over a long enough period of time.
At an all-time high, SHIB’s market capitalization was $43 billion. At this size, even doubling the price would require a huge amount of capital to enter SHIB. Achieving a 113x increase in the value of an asset with a $43 billion market cap would be next to impossible.
To better understand why it is so unlikely that anything could bring SHIB to a dime, let’s take the example of Bitcoin. At its all-time high, BTC’s market capitalization was $1.27 trillion. If SHIB were to reach $0.01, it would have a market capitalization of around $5.89 trillion, 4.6 times that of Bitcoin at its peak.
At the time of this writing, Apple is the most valuable company in the world with a market capitalization of around $2.14 trillion. In second place is Saudi Aramco with a market capitalization of $1.88 trillion, and in third place is Microsoft with a market capitalization of $1.75 trillion. At $0.01, SHIB will have a larger market cap than the world’s three largest companies combined.
The “cheap coin” misconception
So, if the market cap of a Shiba Inu would be so outlandish if SHIB hit $1 or even $0.01, why do we see people posting these price targets on social media so often? The reason is what we like to call the “cheap coin” fallacy.
Most meme coins have a very large amount in circulation, resulting in a low unit price. We sometimes refer to these cryptocurrencies as “penny cryptocurrencies”. This was already a feature of Dogecoin, launched in 2013, but the new generation of meme currencies like the Shiba Inu has taken this concept to the extreme.
The current supply of Dogecoin is 132 billion coins, and about 5 billion new coins are added every year. Meanwhile, the Shiba Inu has 549 trillion tokens. Therefore, the price per token is extremely low – at the time of writing, 1 SHIB costs only $0.00001110.
On a superficial level, this makes SHIB affordable and affordable for new crypto investors. For example, some people who want to invest in cryptocurrencies for the first time avoid bitcoin because 1 BTC is “too expensive”, although it is possible to buy an arbitrarily small fraction of bitcoins.
When viral social media campaigns urge people to buy Shiba Inu to “get SHIB for a penny” or “get SHIB for $1”, some people don’t think about what it actually entails because 0.01 dollars and 1 dollar seem like small numbers.
In fact, you should not look at the unit price of a coin or token, trying to figure out if it is undervalued or overvalued. Instead, you should consider the market cap of a coin or token, as that is what will give you an idea of how it compares to other crypto assets in terms of size.
However, some people are attracted to coins with a low unit price due to the “cheap coin” misconception. If you are a speculator, you can sometimes take advantage of this phenomenon.
Can SHIB still go up?
Even though we have demonstrated that you should not expect SHIB to ever reach 1 cent, this does not mean that the Shiba Inu has no upside potential. The token is trading 87% below its all-time high, so people buying SHIB at current price levels are truly “buying the dip.”
The Shiba Inu project is quite well established, as it has a large base of token holders and listings on major cryptocurrency exchanges. So, in the event of further growth of cryptocurrencies and an increase in demand for Shiba Inu, interested buyers will not have problems with the acquisition of a token.
From a fundamental perspective, the Shiba Inu team is working on several products that aim to make SHIB a more attractive token to own. The most notable of these products is Shibarium, a layer 2 scaling platform for Ethereum.
According to developers Shiba Inu, Shibarium will be focused on providing fast and cheap token transactions for metaverse and gaming use cases. Shibarium will also include a burn mechanism where SHIB tokens will be burned on every transaction.
Other projects that the Shiba Inu team is working on include the ShibaSwap decentralized exchange, the Shiboshis NFT collection, and SHIB: The Metaverse.
If these products become widely adopted, they could catalyze SHIB’s price and make it one of the best cryptocurrencies to buy. However, SHIB is still primarily viewed as a speculative meme-currency, so favorable conditions in the broader cryptocurrency market are likely to be required for SHIB to make substantial profits.
Of course, there is no guarantee that the coin will again reach its previous all-time high. This is especially true for the Shiba Inu, which has only been around since the summer of 2020 and therefore does not have a long price history that would help us understand how SHIB tends to work through cycles in the crypto market.
So, don’t expect a Shiba Inu to hit 1 cent.
If you are making a price prediction for a Shiba Inu, a price level of 1 cent is more or less out of the question. As we have shown, this price level implies a wholly unrealistic $5.89 trillion market cap for the Shiba Inu. Of course, the price of a $1 Shiba Inu is an even more unrealistic scenario.
However, this does not mean that the price of SHIB cannot rise. If the crypto market enters a new bullish phase, SHIB could very well be one of the meme coins that will explode. The Shiba Inu team is working on key products such as Shibarium and SHIB is well positioned due to the large number of cryptocurrency listings.
The Shiba Inu is certainly not the only contender in the meme currency business. If you’re interested, check out our list of meme currencies that could explode next.
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