Crypto Crash: Can the Shiba Inu reach $1 by 2023?

If 2021 was the coming out party for the crypto-currency industry, then 2022 was the nasty hangover. Last year, the combined value of all crypto-currencies exceeded $2.9 trillion, but that number has collapsed to just $800 billion at the time of writing.

Shiba Inu was one of the stars of the crypto-currency industry’s rise, recording a historic annual return of 43,800,000% in 2021. But that enthusiasm has evaporated, with the token losing 74% of its value in 2022 year-to-date.

Many investors would say this is proof that Shiba Inu was just a speculation vehicle, but could the token find new use cases to potentially increase its value? If so, could another meteoric rise take place from its current price of $0.000008 to $1 next year?

Faith in crypto-currencies has collapsed

A series of high-profile crypto-currency collapses this year has eroded investor confidence, even in major tokens like Bitcoin and Ethereum, whose prices have each fallen more than 75 percent from their all-time highs.

The latest casualty is one of the world’s largest crypto-currency exchanges, FTX, which filed for Chapter 11 bankruptcy in dramatic fashion in early November. At this point, it appears that the company owes its creditors (most of whom are its users) at least $3 billionand it is unlikely that the account holders will get all their money back.

But FTX followed several other huge bankruptcies, including Three Arrows Capital, a crypto-currency hedge fund that once managed $10 billion. It filed for bankruptcy in July and triggered a series of side effects that led to the bankruptcy of Voyager Digital, a crypto-currency brokerage that had loaned Three Arrows as much as $670 million that it was unable to recover.

However, these stories pale in comparison to the failure of the stablecoin TerraUSD, which lost an estimated $60 billion in value when it lost its peg to the U.S. dollar last May.

All of these disasters have one thing in common: everyday crypto-currency investors have lost the most money, which government regulation tends to prevent in traditional finance. It’s unclear how likely these investors are to return to the crypto-currency markets in the future.

Shiba Inu faces a series of other challenges

The general turmoil in the crypto-currency market has certainly had an impact on Shiba Inu. The token was trading at $0.000014 just a month ago, so it has lost about 40% of its value since the FTX scandal broke. But Shiba Inu is also failing to gain traction as a payment mechanism despite the efforts of its community, meaning consumers have little reason to buy tokens.

Currently, only 659 merchants accept the token as payment for goods and services, and if that number doesn’t increase significantly, Shiba Inu will be destined to remain on the bangs of the financial world.

The developers of Shiba Inu are currently building new technologies, such as a full metaverse, to help give the token some utility. Shiba Inu is not yet online, but new concept images were released this month, generating some buzz on social media. When the project launches, virtual landowners in the digital world will be able to rename their plots by paying a fee in Shiba Inu tokens.

These tokens will be burned – or taken out of circulation forever – resulting in an organic and proportional increase in the price of the Shiba Inu token. The burning mechanism is a feature of many Shiba Inu-themed projects, including the Shiba Coffee Company, which aims to reduce the massive 589 trillion token supply.

The burn is the only way to reach 1 dollar for Shiba Inu.

With 589 trillion tokens in circulation, a price of $1 per token would mean that the total value of Shiba Inu would reach $589 trillion, making it the most valuable asset on Earth by far. Unfortunately, even the most optimistic bettors don’t believe this is realistic, and therefore the only way to achieve this price is to reduce supply.

It is unlikely that new features such as the metaverse will result in the 99.99998% reduction in supply that Shiba Inu would need for the price to mathematically reach $1. Nor is it possible to rely on the generosity of the community to send its tokens to dead wallets for removal from circulation.

In fact, only 30 million tokens have been burned in the last 24 hours (as of this writing). If this rate remains constant, only 10.9 billion tokens would be burned each year, meaning that it would take over 64,000 years to reduce the supply enough for Shiba Inu to reach $1. So it

Therefore, investors hoping to see Shiba Inu reach $1 in 2023-or within this lifetime-will likely be disappointed. The burn rate would have to accelerate outrageously for that to happen.