SHIB, which exists as an ERC-20 token on the Ethereum blockchain, has over 1.2 million holders. Much of SHIB’s popularity stems from its status as a meme currency, as it is often promoted by its holders on various social media platforms through memes and viral campaigns.
However, SHIB has not been spared from the 2022 crypto-currency bear market. After reaching its all-time high in October 2021, the token went through an intense bearish phase that brought SHIB’s price 87% below its historical highs. When SHIB was on the rise, many token holders wondered if Shiba Inu would reach 1 cent. That was a goal even in the bull market, and it is extremely unlikely now.
In this article, we will address the question of whether it is possible for SHIB to reach a penny. But before we begin, let’s take a brief look at the history of Shiba Inu and its journey to the top of the crypto markets.
Shiba Inu – The meme currency that went from nothing to billions of dollars
Shiba Inu was launched in August 2020 without much fanfare. The token has been touted as an alternative to Dogecoin, and has sometimes been called “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 easily be deployed in decentralized financial applications.
The creator of Shiba Inu is known by the pseudonym Ryoshi. Another important figure in the Shiba Inu project is Shytoshi Kusama, who serves as the lead developer.
SHIB remained largely unknown for about six months after its creation. Prior to 2021, its trading volume was extremely low, less than $1,000 on most days. Ironically, the catalyst that brought Shiba Inu into the spotlight was Dogecoin, which Shiba Inu was meant to replace. The massive increase in the price of Dogecoin in early 2021 led speculators to seek “the next Dogecoin“, and the market chose Shiba Inu as the best candidate.
Will Shiba Inu reach 1 cent?
So, will Shiba Inu make it to 1 cent? It would be extremely difficult, to say the least. Even during SHIB’s historic peak in October 2021, when the token was trading at $0.0000881, SHIB would have had to increase its price 113 times to reach a price of $0.01.
Although SHIB has experienced massive price increases in the past, the probability of reaching large multiples becomes lower as the market capitalization of the asset increases. For example, it would not be so eccentric to say that a crypto-currency with a market capitalization of $10 million could potentially 100x its price over a fairly long period of time.
At its all-time high, SHIB had a market cap of $43 billion. At that size, even a 2x price increase would have required a massive amount of capital to enter SHIB. Achieving a 113x multiple from an asset of $43 billion in market capitalization would be virtually impossible.
To better understand why it’s so unlikely that anything could get SHIB up to a penny, let’s take bitcoin as an example. At its absolute peak, BTC had a market capitalization of $1.27 trillion. If SHIB were to reach $0.01, its market capitalization would be about $5.89 trillion, or 4.6 times more than Bitcoin at its peak.
As of this writing, Apple is the most valuable company in the world, with a market capitalization of about $2.14 trillion. Saudi Aramco is second with a market capitalization of $1.88 trillion and Microsoft is third with a market capitalization of $1.75 trillion. At a price of $0.01, SHIB would have a larger market capitalization than the three largest companies in the world combined.
The “cheap coin” fallacy
So, if Shiba Inu’s market cap would be so outlandish if SHIB hit $1 or even $0.01, why do we see people posting these price targets so often on social media platforms? The reason is what we like to call the “cheap coin” fallacy.
Most meme currencies have a very large supply in circulation, which translates into a low unit price. Sometimes we refer to these crypto-currencies as “penny cryptos”. This was already a feature of Dogecoin, which launched in 2013, but the new generation of meme currencies like Shiba Inu have taken this concept to the extreme.
Dogecoin’s current supply is 132 billion coins, and about 5 billion new coins are added every year. Shiba Inu, meanwhile, has a supply of 549 trillion tokens. As a result, the price per token is extremely low – at the time of writing this article, 1 SHIB is worth only $0.00001110.
On a superficial level, this makes SHIB accessible and cheap for new crypto investors. For example, some people looking to invest in crypto-currencies for the first time avoid bitcoin because 1 BTC is “too expensive“, even though it is possible to buy as small a fraction of the bitcoin as you like.
When viral campaigns on social media urge people to buy Shiba Inu for “get SHIBs for a penny” or “get $1 SHIBs“, some people don’t stop to think about what that would really entail, because $0.01 and $1 seem like small numbers.
In reality, you should not look at the unit price of a coin or token when trying to see if it is undervalued or overvalued. Instead, you should look at the market capitalization of the coin or token, as this is what will give you an idea of how it compares to other crypto assets in terms of size.
Still, some people are attracted to coins with a low unit price because of the “cheap coin” fallacy. If you are a speculator, you can sometimes use this phenomenon to your advantage.
Can the SHIB go up again?
While we’ve shown that you shouldn’t expect SHIB to ever reach 1 cent, that doesn’t mean there isn’t upside potential for Shiba Inu. The token is trading 87% below its peak price, so people who are buying SHIB at current price levels are really getting in on the action.”buy 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. Thus, in case of another crypto-currency rise and an increase in demand for Shiba Inu, interested buyers will have no problem acquiring the token.
From a fundamental perspective, the Shiba Inu team is working on several products that aim to make SHIB a more attractive token to hold. The most notable of these products is Shibarium, a Level 2 scaling platform for Ethereum.
According to the developers at Shiba Inu, Shibarium will focus on providing fast and cheap token transactions for metaverse and gaming use cases. Shibarium will also incorporate a burn mechanism in which SHIB tokens will be burned on every transaction.
Other projects the Shiba Inu team is working on include the decentralized exchange ShibaSwap, the Shiboshis NFT collection and SHIB: The Metaverse.
If these products are widely adopted, they could serve as a catalyst for SHIB’s price to rise and make it one of the best cryptos to buy. However, SHIB is still primarily viewed as a speculative meme currency, so it will likely take favorable conditions in the broader crypto market for SHIB to see substantial gains.
Of course, there is no guarantee that any coin will ever reach its previous all-time high again. This is especially true for Shiba Inu, which has only been around since the summer of 2020 and thus does not have a long price history that would help us understand how SHIB tends to perform through crypto market cycles.
In summary, don’t expect Shiba Inu to reach 1 cent
If you are making a prediction about the price of Shiba Inu, the 1 cent price level is more or less out of the question. As we have shown, such a price level would imply a totally unrealistic market capitalization of $5.89 trillion for Shiba Inu. Of course, Shiba Inu going to $1 is an even more unrealistic scenario.
However, this does not mean that it is impossible for the price of SHIB to rise. If the crypto-currency market enters a new bull market, SHIB could very well be one of the meme coins to explode. Shiba Inu’s team is working on key products like Shibarium, and SHIB is well positioned thanks to numerous crypto-currency listings.
Shiba Inu is of course not the only contender in the meme currency sector. If you’re interested, check out our list of meme currencies that could be the next to explode.