Shiba Inu Beat Bitcoin in the First Half of 2024, but Can It Reach $1?

The combined market capitalization of all cryptocurrencies peaked at $2.9 trillion in 2021 before plummeting by 72% in 2022 to just $826 billion, on the back of several high-profile failures across the industry.

Sentiment has since improved as regulators clamped down on bad actors, and also thanks to the approval of exchange-traded funds (ETFs) for Bitcoin (BTC 2.73%), which added some legitimacy to the crypto industry. Bitcoin soared 44% in the first half of 2024 alone and it’s approaching a new record high, but an unlikely meme token did even better.

A rising tide lifts all boats

Shiba Inu (SHIB 4.15%) soared 61% in the first half of this year, but unlike Bitcoin, it didn’t have ETF approvals or any other specific catalyst supporting its gains. The same speculative fever that drove Shiba Inu to a 45,278,000% return in 2021 — which could have turned an investment of $3 into $1 million — appears to be gathering momentum once again.

Unfortunately, that run ended in a spectacular collapse that saw the meme token plunge 92% from peak to trough. Despite its strong gain this year, it’s still trading 80% below its record high.

Is speculation enough to send Shiba Inu on another historic run? This time, could it surge all the way to $1 per token from its current price of $0.000016?

There is a lack of upside catalysts

Shiba Inu doesn’t have any utility outside of some obscure use cases within the cryptocurrency world. According to Cryptwerk, a mere 949 merchants accept the token as payment for goods and services. If consumers can’t spend their Shiba Inu tokens, there isn’t much reason to own them except under the assumption someone will come along and pay a higher price for them in the future (in other words, speculation).

Developers are trying to improve Shiba Inu to drive adoption. They released Shibarium last year, which is a Layer-2 blockchain solution that solves some of the inefficiencies in the legacy Ethereum network upon which Shiba Inu was originally built. Basically, using Shiba Inu tokens for transactions is now faster and cheaper. A Layer-3 upgrade is also in development, which could improve things like privacy.

Developers are also creating new use cases for Shiba Inu. They have been working on a metaverse since 2022, where the token can be used to personalize digital plots of land with images and custom names. Unfortunately, progress appears to have stalled and there is no firm release date for the virtual world. Developers also created a digital card game called Shiba Eternity, which is designed to promote the Shiba Inu ecosystem.

Unfortunately, none of those initiatives are likely to drive mainstream adoption, which is what Shiba Inu really needs to tame its volatility and sustain value over the long term.

Image source: Getty Images.

The path to $1 is plagued by a mathematical hurdle

Shiba Inu faces a challenge that is even greater than its lack of upside catalysts. There are 589.26 trillion tokens in circulation, which is an enormous amount of supply, and it’s the reason they trade for $0.000016 each instead of a more conventional price (like $1 or higher).

Simple math dictates that if Shiba Inu were to rise to $1 per token, its market capitalization would be a whopping $589.26 trillion. That means Shiba Inu would be worth 165 times more than Apple, which is currently the world’s largest company. It would also be more than five times more valuable than the entire global economy, which generated $105 trillion in gross domestic product last year.

To put it plainly, there is no feasible way Shiba Inu could stage a run to $1. Investors looking to invest in the cryptocurrency space might be better off sticking with the industry leader, Bitcoin. It has never been easier to buy it thanks to the launch of ETFs earlier this year.