Shiba Inu (SHIB) has seen its burn rate skyrocket to impressive heights. This incredible surge in burn rate is causing many to speculate that a price reversal may be on the horizon, as the token’s value continues to experience significant volatility.
As the burn rate of Shiba Inu continues to soar, the cryptocurrency’s fate remains uncertain, leaving investors and enthusiasts alike wondering what the future holds for this meme-inspired token.
Will Shiba Inu be able to maintain its momentum and reach new heights, or will the current volatility lead to a dramatic price u-turn?
Shiba Inu Burn Rate Climbs, Signaling Potential For Price Reversal
Shiba Inu, the popular cryptocurrency inspired by the Shiba Inu dog breed, has experienced an astonishing 30,940% surge in burn rate at the time of writing, according to Shibburn’s data at the time of writing.
But what exactly does “burn rate” mean in the context of cryptocurrencies?
In simple terms, the burn rate refers to the amount of tokens that are permanently removed from circulation. When a cryptocurrency “burns” tokens, they are essentially destroyed, which can have the effect of increasing the value of the remaining tokens.
In the case of Shiba Inu, the massive surge in burn rate is an indication that more tokens are being removed from circulation than ever before, which could potentially lead to a supply shortage and a subsequent increase in value.
Based on the data presented, the Shiba Inu ecosystem is experiencing exponential growth in the number of total transactions, resulting in a significant transfer of 2,254,093,318 SHIB tokens to inactive or “dead” wallets overnight.
SHIB total market cap at 5.8 billion on the daily chart at TradingView.com
The sudden transfer of tokens to dead wallets is believed to be a response to the rapid surge in transaction activity within the ecosystem.
The data highlights two specific addresses that were responsible for a large portion of the transaction volume. One address was used to “burn” 2,005,265,274 SHIB tokens, effectively removing them from circulation permanently.
The other address burnt 246,743,138 SHIB tokens, contributing to the overall reduction in circulating supply.
Where Shiba Inu Stands Right Now
At the time of writing, the price of SHIB on CoinMarketCap stands at $0.00001005, with a 24-hour rally of 0.83%, while experiencing a decline of 2.37% over the last seven days.
Despite the massive surge in the burn rate of Shiba Inu tokens, the price of SHIB has shown little movement.
One possible explanation is that the market has already priced in the impact of the burn rate, and therefore, the current token burn rate is not enough to move the price significantly.
Another factor could be the current market conditions, which have been unfavorable to many cryptocurrencies, including Shiba Inu.
Furthermore, the sheer number of SHIB tokens in circulation could be another contributing factor to the price stagnation.
With a circulating supply of over 394 trillion SHIB tokens, any changes in the token burn rate would need to be substantial to affect the overall supply and demand dynamics of the market.
-Featured image from Picography