Shiba Inu (SHIB) is one of the most popular cryptocurrency projects on the market. This asset had an incredible price surge during the 2021 bull run. The price of SHIB increased millions of percent from its launch in August 2020 to its all-time high in October 2021.

Why Did Shiba Inu Experience a Strong Price Increase in 2021?

One of the most important catalysts for SHIB's incredible price increase in 2021 was the massive token burn by Vitalik Buterin. The co-founder of Ethereum received half of the supply of SHIB at launch. Buterin decided to burn 90% of the tokens he received and donated the remaining portion to charity.

Buterin's actions led to a significant decrease in the supply of SHIB. At that time, demand for SHIB was also very high. Both developments led to a significant price increase for this dog-themed cryptocurrency. Early investors made millions of dollars in profits with minimal investment.

What Is the Asset Price If 50% of Tokens Are Burned?

Currently, there are approximately 589 trillion SHIB tokens in circulation. The project will have about 294.5 trillion tokens in circulation if 50% of the tokens are burned. Consider that the market capitalization of SHIB remains at $15.87 billion. In this scenario, the price of each token would reach $0.00005388. Reaching $0.00005388 from the current price would entail a price increase of about 99%. This price increase seems significant, but it has not yet reached SHIB's all-time high of $0.00008616.

If the market capitalization of SHIB increases and the circulating supply decreases, the price of this asset could rise much higher than $0.00005388.

The lead developer of Shiba Inu, Shytoshi Kusama, also emphasized that burning alone will not push the price of SHIB up. Burning must be accompanied by high demand for a significant price spike.

The SHIB development team is said to be researching a new burning mechanism, rumored to burn trillions of tokens each year. This new burning mechanism could help push the price of SHIB to new all-time highs.

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