Outside Source
TL;DR
- Shiba Inu’s price rose substantially recently, but a major rally will depend on favorable market conditions and increased SHIB burning.
- 55% of SHIB holders are now in profit, showing a positive shift.
How Realistic Is Such a Scenario?
Shiba Inu has been making the headlines lately, with its price soaring by 35% in the past week. Its market capitalization jumped above $11.5 billion, thus becoming the 14th-biggest cryptocurrency but still the second-largest meme coin (trailing behind Dogecoin).
We decided to ask ChatGPT whether that rally is sustainable and if the meme coin could erase a zero from its valuation before New Year’s Eve.
The popular AI-powered chatbot did not rule out that possibility. However, it claimed that a major bull run would depend on numerous factors, such as favorable market sentiment, Shibarium adoption and utility, and an increase in the SHIB burn rate.
The layer-2 scaling solution – Shibarium – took center stage recently when the total blocks processed on the network exceeded 7 million. In addition, the number of total transactions is just south of 420 million, whereas wallet addresses are inching toward 2 million.
The protocol officially went live last August. It is primarily designed to foster the development of the Shiba Inu ecosystem by enhancing scalability, improving speed, and lowering transaction costs. For more updates on the ecosystem, make sure to check out our Shibarium news.
SHIB’s burning mechanism has also been on the rise. As CryptoPotato reported on September 27, the burn rate skyrocketed by almost 34,000%, resulting in more than 1.8 billion tokens sent to a null address.
Continuous efforts in that field will reduce the huge circulating supply of the meme coin, potentially triggering a price increase (if combined with a non-declining demand).
It is worth mentioning that erasing a zero from SHIB’s value would require its market cap to pump to a whopping $115 billion. As of the moment, Bitcoin (BTC), Ethereum (ETH), and Tether (USDT) are the only three cryptocurrencies whose capitalization is higher than that.
SHIB Holders Are Slowly Escaping the Red Zone
Unsurprisingly, the latest price spike of the meme coin has benefited its investors. IntoTheBlock data shows that 55% of those exposed to the asset are currently sitting on some paper profits, while 43% remain underwater.
The situation looked much worse in September 2023, when SHIB’s price experienced a severe correction. At that time, almost 90% of the asset’s holders were in the red.
The popular meme coin has a solid community base consisting of long-term investors and proponents. According to the platform, almost 80% of the SHIB holders jumped on the bandwagon more than a year ago. 19% did so in the past 12 months and only 2% joined the ecosystem in the last 30 days.
This article first appeared at CryptoPotato
