Shiba Inu (SHIB) is the second-largest meme coin and has a unique feature compared to Dogecoin: token burns. Hardly any other topic is discussed as frequently in the SHIB community (except Shibarium) and it often leads to confusion. Everywhere you read: "Billions of SHIB burned, what happens to the price".
But few emphasize that SHIB burns generally have no significant impact on the price, at least not with the current volumes. Furthermore, the total supply of SHIB in circulation, which is 589.346.914.631.298.1 SHIB, is gigantic, which means that large numbers can quickly become a mirage.
The SHIB burn tracker, the most popular service for monitoring SHIB burns, has taken steps to dispel these misunderstandings and shed light on the factors that determine SHIB's price movements.
SHIB Burns X Shiba Inu Price
The expert emphasizes the essential role of demand and unified investments in shaping the SHIB price, rather than relying solely on token burns. While burning a considerable number of tokens may seem effective, it cannot significantly influence the price without continuous and substantial token purchases that match the current purchase price. As the analyst puts it, "Burning 10 billion tokens in a week will not affect the price if larger transfers are being bought daily and the prices have just remained stable."
The core of SHIB's price dynamics lies in the fundamental economic principles of supply and demand. Burning tokens can lead to scarcity and reduced supply, but it is the demand that gives value to the token. As the burn tracker aptly points out, "A token can destroy 90% of its supply, but if there is no demand for that token, it has no value." In other words, burning alone cannot increase the value of SHIB; it is rather the increase in demand together with a lower supply that can positively influence the price.
The role of large holders, especially centralized exchanges, is also important in the SHIB ecosystem. The tracker notes that "the top 100 accounts (excluding the burn address) hold almost 400 trillion of the token supply." These large holders affect liquidity and accessibility for traders and influence the overall market behavior of the token.
While the tracker recognizes the potential impact of token burning, it cautions against placing too much emphasis on it as the sole driver of SHIB's price success. Success should be evaluated holistically, and arbitrary price targets should not determine the path of a token. As the SHIB tracker suggests, "The success of a token does not always mean reaching a specific price, such as '0.01 dollars.' Many have their own price targets." Instead, long-term growth and acceptance, as well as continuous interest and community participation, should be considered as important indicators of success.
Furthermore, it is important to recognize that SHIB is still in its early stages, while the introduction of Shibarium creates a significant driver for higher SHIB burns. As the burn tracker emphasizes, "Crypto is still growing, and we have seen significant growth in the number of crypto holders worldwide."
At the time of printing, the SHIB price was $0.00000779, continuing the upward trend of the past few weeks (black line), although the price recorded a small loss of 0.8% in the last 24 hours.
Throughout the article, it is clear that token burns alone cannot determine the price of SHIB. Other factors such as demand, investments, large holders, and long-term growth play significant roles. As SHIB continues to evolve and gain attention, it will be interesting to see how these dynamics shape its future.
