The main reason why the SHIBA INU is worth so little is because of the enormous amount of Circulating Supply or circulating currency that currently exists on the market. The number of SHIBs available for purchase is nearly infinite.
When the SHIBA INU project was created, it was decided that a finite number of units would be issued: 1,000,000,000,000,000, which is the same as one quadrillion units. A quadrillion in English, by the way. That number, although finite, for practical purposes is very close to an infinite number of coins. That’s roughly 128,205 coins for each person in the world, assuming a world population of 7,800,000,000 people.
It is said that of that quadrillion SHIBs, half were given to Vitalik Buterin, one of the creators of the Ethereum cryptocurrency. Mr Buterin donated 10% of that amount to a COVID-19 relief fund in India and basically destroyed the rest. That is, suddenly the number of available Shiba coins dropped from 1 quadrillion to 0.55 quadrillion.
The concept of Circulating Supply is very important in financial markets, since the unit price of an asset largely depends on it. From the Circulating Supply and the Market Cap.
The Maket Cap or market capitalization is the total value of a specific market. In the case of SHIBA INU the current market capitalization is $31,973,642,921.38, according to the Coin Market Cap website. A few days ago it reached 42.28 billion at the precise moment that Shiba reached its all-time high of $0.00008719.
The value of the Market Cap, together with the Circulating Supply, is what defines the unit value of an asset. At this time, the Circulating Supply shown in Coin Market Cap is 549095509738353 (just under 0.55 quadrillion), which is not an updated value, but more on that later.
In short, if we divide the Market Cap by the Circulating Supply we will obtain:
That value is very close to the current value of SHIBA INU, which at the beginning of this post was 0.00005864. This value, as we have already seen, depends on the market capitalization and the amount of currency in circulation.
So, if what we want is to increase the unit cost of SHIBA, what we have to do is increase the Market Cap, reduce the Circulating Supply or both. Can this be done? It can be done. It is easy to do? Absolutely not Let’s see why.
Increase Market Cap
For the price of Shiba to increase due to the effect of the Market Cap, an absurd investment of money would be needed by a number of investors that probably does not exist on Planet Earth. Let’s make a small Excel sheet to see the amounts we are talking about:
Under current conditions it would take 5.49 Trillion dollars for SHIBA to reach a value of Shiba Inu Reach One Cent. In my case that would not make me a millionaire, but it would allow me to pay my mortgage. That would be fantastic.
How much money is 5.5 Trillion? Obviously a lot, but how about comparing it to other assets in our current economy?
SHIBA INU’s path to the penny through market capitalization seems long and arduous. It would basically have to match Bitcoin and then go 5 times above that level, which is a long shot. Along the way it would have to surpass the capitalizations of Amazon, Google and Microsoft and reach a value greater than the current value of those three companies together.
The main problem with this scenario is the actual value of Shiba. In the case of Microsoft, Google, Amazon, Bitcoin, Ethereum, and BNB, they are all important assets with tangible utility. Bitcoin, Ethereum, and BNB are used around the world for many things beyond simple speculation on their value. More than assets, they are technologies that are used to fulfill certain functions in the real world.
In the world there are companies that are dedicated to mining Bitcoin and Ethereum. Bitcoin is already legal tender in El Salvador, and other countries will probably follow suit. Ethereum is used to create NFTs, which is a huge and expanding market. It has also entered heavily into the gaming world, a multi-million dollar industrialist. There are plenty of articles on the Internet about the uses that are being given to these technologies.
In the case of Shiba, the only thing currently used is to speculate. He is a giant with feet of clay. It is a project that grew very fast and now they do not know what to do with all that enormous potential that they have accumulated in recent months. In order to reach the next level, from decades of billions to hundreds of billions, Shiba will have to prove that it is a useful technology for something beyond speculation.
