Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn

Shiba Inu burn rate drops significantly as price faces pressure

GrafaGrafa2024/08/20 10:20
By:Isaac Francis

Shiba Inu (CRYPTO:SHIB) has been struggling recently, with its price dropping by 26% over the past 30 days.

This decline is further compounded by a sharp 90% decrease in the token's burn rate, raising concerns about the future trajectory of SHIB's value.

Over the last week, fewer than 13 million SHIB tokens have been removed from circulation, signaling a potential risk of further price declines.

The burning mechanism is a critical aspect of Shiba Inu's strategy to reduce its massive circulating supply, which currently stands at around 583 trillion tokens.

By making SHIB scarcer, the burn rate is intended to increase the token's value over time.

However, for this strategy to be effective, demand for SHIB needs to remain stable or grow, which is currently uncertain given the declining burn rate.

Additionally, Shiba Inu's overall market position has weakened, with its market capitalisation falling below $8 billion, making it the 16th-largest cryptocurrency.

Other indicators also point to potential challenges ahead, including declining Net Network Growth and reduced activity from large holders, known as whales.

These factors could contribute to continued downward pressure on SHIB's price.

In response to these challenges, the Shiba Inu team has introduced a new burning initiative as part of their layer-2 scaling solution, Shibarium.

This new burn program operates differently from the original community-driven burn mechanism.

In the Shibarium ecosystem, the governance token BONE (CRYPTO:BONE) is used to pay transaction fees, and a portion of these fees is allocated to purchasing and burning SHIB tokens.

While this system is designed to reduce the overall supply of SHIB, its success will depend on the level of participation and the amount of BONE tokens being used.

The sharp decline in SHIB's burn rate, coupled with broader market challenges, has raised concerns about the token's future performance.

Investors and holders of Shiba Inu will need to closely monitor these developments, as the effectiveness of the burn mechanisms and overall market conditions will play a significant role in determining SHIB's value going forward.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Stake to earn
CEC, QTLX, GDV and other popular new coins are in hot progress!
Stake now!