Some investors are pessimistic about Shiba Inu ( SHIB -1.78% ) these days. The digital token has lost roughly two-thirds of its value since late October. Others, though, remain optimistic. They would note that the token’s price appears to have stabilized and is even up more than 20% over the past month.
There’s one major milestone for Shiba Inu on the way that some argue justifies a bullish view. Will Shiba Inu skyrocket thanks to this big upcoming catalyst?
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Burning fever
The website Watcher Guru News talked with several key Shiba Inu developers last week about a number of topics. However, one received especially intense interest.
A key member of the Shiba Inu team known as Archangel revealed that ShibaSwap 2.0 will include a feature that allows SHIB tokens to be burned. ShibaSwap 2.0 is the planned new version of Shiba Inu’s own decentralized cryptocurrency exchange.
“We want to make the burn rate grow with the utilization rate of the platform,” Archangel stated, later adding, “It’s about getting the supply slowly reduced as you use the platform.”
Many Shiba Inu supporters have been waiting on a solid burn strategy for the token. There are currently a whopping 549.1 trillion SHIB coins in circulation. Reducing that through burns would increase the value of the remaining coins.
A big catalyst?
The exact launch date for ShibaSwap 2.0 hasn’t been announced yet. But there’s some speculation that it could come in the first half of this year. Just how big a catalyst might the new burning mechanism be?
It’s possible (and perhaps even probable) that the mere existence of a burning feature on ShibaSwap 2.0 will spur interest in the token. And higher interest in any cryptocurrency usually leads to its price rising.
But it remains to be seen how much burning of SHIB tokens will actually be done. Anyone anticipating a massive amount of token burns is likely to be disappointed. Archangel poured cold water on unrealistic expectations. He said that a burn of 90% of SHIB tokens, for example, was out of the question.
Still, any significant amount of burning should boost Shiba Inu’s price. Putting all other external factors aside, the price movement of the token should directly correlate with the level of burning.
Strength in numbers
Investors probably shouldn’t look for the new burning mechanism in ShibaSwap 2.0 to cause Shiba Inu to skyrocket by itself. A better approach would be to look at all of the potential catalysts that it could have on the way. As the old saying goes, “There’s strength in numbers.”
The good news is that Shiba Inu indeed has plenty of potential catalysts in 2022. The launch of Shibarium, a layer-2 solution, could especially light a fire beneath the meme token. The development of gaming capabilities for Shiba Inu is another major likely catalyst. Increased adoption by online exchanges — in particular, the possibility that Robinhood Markets could start supporting SHIB — is another huge possible growth driver on the table.
And there could be even more catalysts. Near the end of Watcher Guru’s event, SHIB’s Discord moderator (known as Queenie) said that key Shiba Inu developer Shytoshi Kusama sent her a chat message that stated, “Something is coming and it will be appreciated forever and ever.” No details were forthcoming about what this “something” might be.
None of this necessarily means that Shiba Inu’s price will take off again. The pessimists could be right about the token. But no one can argue that there aren’t several developments on the way that at least hold the potential to spur a rebound.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
