Can Shiba Inu Reach $1 in 2025? Brace Yourself for a Surprising Answer

Shiba Inu (CRYPTO: SHIB) soared by 45,278,000% during 2021, which means had you bought it on Jan. 1 and sold it on Dec. 31, an investment of as little as $3 could have made you a millionaire. Sadly, none of us own a crystal ball.

It proved to be nothing more than a speculative rally because Shiba Inu had lost more than 90% of its peak value by mid-2022. But the meme-token has recovered from its low point thanks to improving investor sentiment, which reached feverish levels when Donald Trump won the presidential election last November.

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Investors are hopeful the Trump administration will impose crypto-friendly policies and reduce the regulatory burden on the industry. Could those catalysts send Shiba Inu to $1 per token in 2025? The answer is going to surprise you.

The crypto industry is more valuable than ever

The total value of all cryptocurrencies in circulation hit a record high of $3.9 trillion in December, after spending more than two years in a bear market. Shiba Inu accounts for a mere fraction of the industry's value because its market capitalization is only $11.4 billion. Bitcoin (CRYPTO: BTC), on the other hand, is worth $2.1 trillion and climbing.

President Trump was a big crypto supporter on the campaign trail, but he was especially fond of Bitcoin. He threw his support behind ideas like establishing a strategic reserve within the U.S. government, which would see the Treasury department become an active buyer of Bitcoin on the open market.

After winning the election, he also nominated Paul Atkins to run the Securities and Exchange Commission. Atkins is currently the co-chairman of the Token Alliance, which is a crypto advocacy organization, so investors are hopeful he will approach the industry with a light regulatory touch. That could pave the way for new use-cases for many different cryptocurrencies, which is the key to creating sustainable long-term value especially for speculative tokens like Shiba Inu.

As it currently stands, many investors consider Bitcoin to be a good store of value, similar to a digital version of gold. Shiba Inu lacks that support for a number of reasons -- it has no concrete use cases, it has a substantial supply problem, and it doesn't function well as a currency because it's built on the legacy Ethereum network, which can be clunky and expensive to use.

That's why, despite recovering from its 2022 low point, Shiba Inu is still down 77% from its 2021 high, while Bitcoin continues to march to new record levels.

Shiba Inu's major supply problem

The reason Shiba Inu trades at a minuscule price of $0.000019 per token is because of its enormous supply. There are 589.2 trillion tokens currently in circulation -- compare that to Bitcoin, for example, which has a fixed total supply of just 21 million coins.

Simple math dictates that if Shiba Inu rose to a price of $1 per token, multiplied by its supply, its market capitalization would be $589.2 trillion. That would make it 163 times more valuable than the world's largest company right now, Apple, which is worth $3.6 trillion.

Technically, Shiba Inu would also be more valuable than the combined wealth of every person, business, and government on Earth, which stood at $454 trillion at the end of 2022 (according to UBS).

The Shiba Inu community is trying to solve the supply problem by "burning" tokens, which removes them from circulation forever. The easiest way to do this is by sending tokens to a dead wallet where they can never be retrieved. Shiba Inu's price per token should increase organically in proportion to the number of tokens burned which, in theory, could open the door to a price of $1.

Image source: Getty Images.

Shiba Inu's path to $1 will blow your mind

Here's where things get tricky. Around 99.99998% of the current supply will have to be burned to warrant a price of $1, based on Shiba Inu's current market cap. In other words, practically all of the 589.2 trillion tokens in circulation need to be eliminated, leaving just 11.4 billion.

Only 1.2 billion tokens were burned in January, which translates to an annualized rate of 14.4 billion.

Clearly, that won't be enough to send Shiba Inu to $1 in 2025, but here's the shocking part: It will take a whopping 40,916 years to burn all the necessary tokens at the current pace.

If you're hoping to make money, I have even more bad news. Burning tokens doesn't create any value -- it simply reduces supply, which makes each token appear more valuable because it trades at a higher price. In reality, even if you lived for the next 40,000 years, you would simply have 99.99998% fewer tokens with the remainder worth $1 each.

Therefore, your net financial position would be exactly the same as it is today. Well, actually, you would be much worse off after 4,000 decades worth of inflation.

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bitcoin, and Ethereum. The Motley Fool has a disclosure policy.