Is the increase in Shiba Inu burning really positive?
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As emphasized above, the burning of tokens translates into an increase in activity on the Shibarium network. A significant portion of the commissions generated is allocated to burning in an automated manner, which means that the increase in network activity can be a bullish component for the coin's price.
It is worth mentioning that the burning of tokens is a process that consists of sending coins to a cold wallet. Unlike other wallets, the private keys of these addresses are destroyed, making it impossible to recover the tokens they receive.
The coins sent to those particular addresses permanently leave the market. Essentially, it is a removal of those tokens from liquidity, and hence the process is referred to as burning. When a particular token is sent to be burned, it generates scarcity and, therefore, enhances the increase in price in the medium and long term.
This is the case for Shiba Inu and its burning process. Despite the bullish component of the current increase in burning, an immediate effect is unlikely due to the enormous circulating supply of this coin. However, increases in the burn rate generally provoke enthusiasm in the market, motivating investors to buy coins.
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