Shiba Inu (SHIB) had a meteoric rally during the 2021 bull market. The asset’s price rallied by several million percent within months of the launch in August 2020. SHIB went on to hit an all-time high of $0.00008618 in October 2021, at the height of the bull market. Let’s look at why SHIB experienced such an astronomical rise, and why it may not be able to replicate it again.
What Pushed Shiba Inu During The 2021 Rally, And Why Can’t It Happen Again?
One of the primary catalysts for Shiba Inu’s (SHIB) incredible rally during the 2021 bull run was Vitalik Buterin’s massive token burn. Buterin received half of SHIB’s entire supply upon its launch and decided to burn 90% of the coins he received. His actions led to a substantial dip in the coin’s supply. Meanwhile, being associated with Buterin led to a massive surge in the project’s validation. Investors rushed to buy Shiba Inu (SHIB) soon after. The dip in supply and surge in demand led to a massive price spike for the asset. Investors with minimal capital made massive returns. People became overnight millionaires, and Shiba Inu (SHIB) turned into a mythic crypto project.
However, replicating the 2021 rally is next to impossible. Firstly, Shiba Inu (SHIB) still has about 589 trillion coins in circulation. A majority of the coins are owned by whale wallets. A substantial number of big wallets have to agree to let go of their SHIB holdings for a larger cause. This may not come to fruition. On the other hand, the Shiba Inu (SHIB) team is reportedly working on a new burn mechanism, rumored to destroy trillions of coins yearly. Even if the new burn mechanism burns 10 trillion coins every year, it would take years for the asset’s supply to dip to levels where prices can actually surge by millions of percent.
Also Read: Shiba Inu Price Prediction for Feb 28: Consolidation or Breakout?
Therefore, the numbers do not support Shiba Inu (SHIB) experiencing another 2021-like rally. While the asset may hit new peaks and milestones, another multi-million percent rally is most likely impossible.
