Shiba Inu is a Cryptocurrency that got a good amount of exposure by getting recognized as a meme coin in the crypto market industry. Top cryptocurrencies such as Shiba Inu and Dogecoin are recognized as meme coins in the Market.
Shiba Inu vs. Dogecoin:
Both Shiba Inu (current price: $0.00001283) and Dogecoin (current price: $0.08444) are trading for significantly less than they were last year, but they have been on an upward trend over the past week.
After recent incidents, popular meme coins like Dogecoin and Shiba Inu are still in the headlines. Shiba Inu and Dogecoin are considered adversaries due to their respective levels of notoriety in the cryptocurrency industry. Even if Dogecoin was created in 2013, Shiba Inu was only created in 2020. It is common knowledge that Elon Musk played a role in Dogecoin’s meteoric rise to prominence in the cryptocurrency market. If Dogecoin relies on Musk to maintain its market value, Shiba Inu must do the same to ensure its continued existence in the cryptocurrency market.
$1 Token Price:
Cryptocurrency is a big and intricate industry. There are now more than 20,000 different tokens available to traders. Most of them have not been well tested and therefore provide users very little in the way of tangible benefits.
For this reason, Shiba Inu (SHIB -0.12%) has been criticized by several investors both inside and outside the cryptocurrency industry. Like similar meme tokens before it, its value has skyrocketed due to marketing and excitement.
For a short period of time in 2021, this coin offered investors a return of over 40,000,000% each year. If someone had invested $100 at the precise right time and stayed on until the ultimate peak (impossible), they would now have a multimillion-dollar holding. Speculators were drawn to the high profits offered by Shiba Inu, driving its price to an all-time high and placing it among the top 10 most valuable cryptocurrencies.
The celebration is over, and the token is now down around 90% from its 2021 high. However, it is still the 15th most valued cryptocurrency, and there are advocates for a price of $1.
A dose of Reality:
More than 589 trillion Shiba Inu tokens have been created and circulating. When writing, the cryptocurrency traded for around $0.00001, giving it a market valuation of around $6 billion. Thus, Shiba Inu’s peak implied valuation was nearly $50 billion (accounting for token inflation to the present day).
A possible increase in Shiba Inu’s price to $1 per token would suggest a valuation of just over $589 trillion. And that would make Shiba Inu far and away the most valuable asset in the world. To put things in perspective, in 2021, the global gross domestic product was $96.5 trillion.
Any valuation modeler using even elementary arithmetic would quickly realize this is an unattainable goal. To get to $1, the whole number of Shiba Inu tokens would have to be drastically reduced, which is currently impossible.
Shiba Inu Today:
Shiba Inu’s recent price fluctuations mirror the bullish sentiment surrounding cryptocurrencies. Shiba Inu has increased by roughly 18% so far this year. Although it is one of the most volatile tokens, Shiba Inu’s price has followed the Market’s general trend of increasing or decreasing.
This past week, Shiba Inu rose significantly due to rising optimism surrounding the public beta release of the company’s Shibarium platform. Investors anticipate that the increased scalability of the Shiba Inu network made possible by this Layer 2 solution would lead to faster and cheaper user transactions.
As it stands, Shiba Inu offers very little in the way of practical value to its users. This project has a large and influential user base and has already proven to be a good way to capitalize on memetic momentum. The Market has been extremely bullish recently, but apart from Shibarium and a few other projects (such as Shiba Inu’s move into the metaverse), there is little to point to as a fundamental driver for this token to rise significantly above its previous all-time highs.
Pricing this token is tough because Shiba Inus are notoriously tricky to appraise. Trying to model a fundamental valuation of a digital asset is difficult, as is the case with many other types of digital assets. Most of these enterprises lack sustainable business concepts and do not possess assets that can generate cash flows. The Shiba Inu breed is a good example of this.
It’s difficult to put a number on what Shiba Inu should be valued right now, but it’s far simpler to pinpoint prices at which it will never trade. As long as monetary law remains unchanged, a price of $1 is impossible.