The historical value of Shiba Inu (SHIB) has struggled to grow due to various factors inherent to the cryptocurrency market and the project itself. Below are some of the key reasons:
1. Massive Circulating Supply
Shiba Inu has a total supply of 1 quadrillion tokens, of which there are still a large amount in circulation.
This high supply dilutes the value of each individual token, making it difficult for the price to reach significant levels, like $0.01 or $1, without a massive burn of tokens.
2. Dependence on Speculation
SHIB is known as a "memecoin", which means its initial value was based more on speculation than on solid fundamentals.
Its explosive growth in 2021 was driven by viral interest and not necessarily by technological developments or use cases.
3. Competition in the Market
There are thousands of cryptocurrencies in the market, many of which offer more advanced technologies and use cases (like Ethereum or Solana).
This limits interest in SHIB for institutional investors, who tend to prefer projects with real and sustainable applications.
4. Insufficient Token Burns
Although Shiba Inu has implemented mechanisms to burn tokens, the amounts eliminated are not significant enough to drastically reduce the circulating supply.
Without an acceleration in these burns, the price of SHIB cannot increase significantly due to oversupply.
5. Lack of Tangible Use Cases
Despite developments like Shibarium and its entry into the DeFi and NFT space, many users still perceive SHIB as a memecoin without a solid purpose.
Projects with clearer uses, such as smart contracts or decentralized applications, tend to attract more long-term investment.
6. Influence of the Overall Market
Like most cryptocurrencies, SHIB depends on the overall market conditions.
In a bearish market or during times of economic uncertainty, investors tend to avoid high-risk assets like SHIB.
What is Needed for SHIB to Grow?
1. Reduction of Supply: Increase token burns to reduce the circulating amount.
2. Technological Developments: Expansion of Shibarium, new partnerships, and use cases that make SHIB more attractive.
3. Greater Global Adoption: Increase the acceptance of SHIB as a means of payment and on DeFi and NFT platforms.
4. Stability in the Crypto Market: A general bullish market can attract more interest towards SHIB.
