Can Shiba Inu Reach $1 in 2025? The Answer Might Blow Your Mind.

2024 was a great year for cryptocurrencies, with the total value of all coins and tokens soaring to an all-time high of $3.9 trillion shortly after President Trump was elected in November. Investors were excited about his pro-crypto stance and the friendly policies that might follow.

Even cryptocurrencies at the highly speculative end of the market surged. Meme-token Shiba Inu (CRYPTO: SHIB) ended last year with a gain of 107%, although it failed to surpass its record high from 2021. It delivered one of the greatest returns in the history of the financial markets that year, soaring by 45,278,000% -- if you had a crystal ball and timed your investment perfectly, that would have been enough to turn just $3 into over $1 million.

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With a pro-crypto administration in office, the stage might be set for Shiba Inu to deliver another big return. Could 2025 be the year it soars to $1 from its current price of $0.000013? Some of the math behind the answer might blow your mind.

Image source: Getty Images.

Pro-crypto government policies probably won't help Shiba Inu

On the campaign trail last year, President Trump promised to make America the crypto capital of the world. In his first 100 days in office, he has already:

• Appointed Paul Atkins, who is a major supporter of the crypto industry, to run the Securities and Exchange Commission (SEC). He was officially confirmed by the Senate in April.
• Established a strategic Bitcoin reserve, where the U.S. government will store coins it has seized from criminals and bad actors. The government might even become an active buyer of Bitcoin one day, if Congress approves.
• Established a U.S. digital asset stockpile, where the government will hold seized crypto assets other than Bitcoin. These include popular coins and tokens like Ethereum, XRP, and even Shiba Inu.

Under Atkins' leadership, the SEC is likely to regulate the crypto industry with a much lighter touch, since he formerly served as the co-chairman of the Token Alliance and as a board member of blockchain company Securitize. Even before he was officially sworn in, the agency paused or withdrew active legal cases against companies like Binance, Coinbase, and even Ripple.

Theoretically, less regulation could enable developers to create new use cases for speculative tokens, which might increase their value. But despite their best efforts, this has been a constant struggle for the Shiba Inu developers. Only 1,056 businesses are willing to accept it as payment for goods and services worldwide (according to Cryptwerk), even after the release of a layer-2 blockchain solution called Shibarium, which was designed to make it cheaper and easier to transact using Shiba Inu.

Moreover, the U.S. government has seized some Shiba Inu tokens, which could find their way into the digital asset stockpile. However, President Trump's executive order clearly states the government won't be actively buying cryptocurrencies for the stockpile, so Shiba Inu is unlikely to yield any real benefit over the long term.

Supply might be the biggest barrier to $1

The headwinds I mentioned above will certainly be hurdles on Shiba Inu's journey to $1, but its supply could be an even greater barrier. There are 589.25 trillion tokens in circulation, so at the current price of $0.000013, Shiba Inu has a market capitalization of $7.5 billion. Simple math suggests that a price of $1 per token would result in an eye-popping market cap of $589.25 trillion.

In other words, Shiba Inu would be 12 times more valuable than the combined market cap of all 500 companies in the S&P 500, which stands at $47.5 trillion as of this writing. It would also make Shiba Inu almost 20 times more valuable than the annual output of the entire U.S. economy, based on a gross domestic product (GDP) of $29.7 trillion last year.

Simply put, there is no way Shiba Inu could reach $1 in its current state.

The mind-blowing way Shiba Inu could still reach $1

The Shiba Inu community has banded together to solve the supply problem by "burning" tokens, which means removing them from circulation forever. The simplest way to do this is by sending them to a dead wallet where they can never be retrieved.

In theory, the price per Shiba Inu token will rise in proportion to the number of tokens burned, so this could be a legitimate pathway to reaching $1. However, investors will have to burn 99.99998% of all current supply to succeed, leaving just 7.5 billion remaining in circulation. Unfortunately, burning 589.24 trillion tokens is a monumental task; investors burned just 346.7 million last month, which translates to an annualized rate of 4.1 billion.

At the current pace, it will take a mind-blowing 143,717 years to burn enough tokens to reach $1. But it gets worse because even if you lived to see that day, you wouldn't actually make any money. You would simply have 99.99998% fewer tokens, which are worth $1 each, so the net value of your holdings would be exactly the same.

Actually, you would be much worse off after accounting for 143,717 years 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 Bitcoin, Coinbase Global, Ethereum, and XRP. The Motley Fool has a disclosure policy.