Can Shiba Inu Reach $1 In the Next 12 Months?

Shiba Inu (CRYPTO: SHIB) might have a small market capitalization of $3.3 billion (as of Sept. 28), but that hasn't kept it from being one of the most popular digital assets on Earth. It capitalized on the investment community's interest in Dogecoin, while aiming to be more functional by leveraging its presence on the Ethereum blockchain.

This meme token has been in a troubling down cycle, however. Maybe positive momentum is on the horizon. Can Shiba Inu's price increase by almost 18,000,000% and reach $1 in the next 12 months?

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Weak fundamentals support ongoing price pressure

Over the long term, the most important factor for any cryptocurrency to even have a chance at staying relevant is a fundamental edge that supports real-world utility. It's accurate to assume that Shiba Inu falls flat in this area. Its developers built a metaverse, a decentralized exchange, and a layer-2 scaling solution, all innovative features within the cryptocurrency industry.

However, these strategic actions have done nothing to drive Shiba Inu's price, a clear indication that they're not catching on with users. What's more, there are numerous other cryptocurrencies that have more promising feature sets.

Shiba Inu followers know that fundamentals have minimal impact on the token's price movement. What has mattered most historically has been how excited (or disappointed) the Shib Army, the cryptocurrency's community of supporters, was at any given time. Even these advocates appear to be losing interest. This is clear when you realize that Shiba Inu currently trades 94% off its peak from almost five years ago.

Forget about burning tokens

Shiba Inu is in the process of burning its token supply. This entails sending tokens to a dead wallet, resulting in a removal from the circulating supply. Investors can think about it as if it were a company conducting share repurchases. From a fundamental perspective, nothing changes.

This doesn't guarantee that the desired outcome will happen. Existing token holders aren't certain to see the value of their positions increase simply because the community is undergoing a coin-burning scheme.

Additionally, Shiba Inu isn't burning enough tokens. It's not even close. In the past 30 days, 375.6 million tokens were burned, translating to roughly 4.5 billion on an annualized basis. Of the gargantuan supply of 589.2 trillion tokens, this represents next to nothing.

After Shiba Inu's mind-boggling 2021 run, it has fallen out of favor. There are probably still strong supporters out there who think that good times are coming. It's smart to drastically temper those expectations, however. This meme coin will not hit $1 in the next 12 months or ever.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Ethereum. The Motley Fool has a disclosure policy.