Shiba Inu Plummets 93% from All-Time High, Will the Historic 2021 Surge Rally Return?

▲ Shiba Inu (SHIB)/AI-generated image ©

Shiba Inu (SHIB), a representative meme coin among the top market capitalization cryptocurrencies, once achieved a record-breaking surge, placing it at the center of the cryptocurrency market. Now, the background behind this phenomenon and the key challenges for it to emerge from its recent slump have been revealed, drawing significant attention from investors.

According to the crypto media outlet Watcher.Guru on May 24 (local time), Shiba Inu (SHIB) recorded ultra-fast growth within months of its launch in August 2020, becoming one of the assets that saw the most dramatic rise during the 2021 bull run. Although it has experienced steep price corrections in recent years, its continued strong influence in the crypto industry is attributed to its unique issuance structure and an intertwined backstory with the founder of Ethereum (ETH).

The decisive factor that earned Shiba Inu the market's full trust in its early days was its unconventional move of sending half of its total supply to Vitalik Buterin, co-founder of Ethereum. As direct and indirect links with Buterin were proven, SHIB's external credibility surged. Subsequently, Buterin permanently destroyed 90% of the tokens he received through a token burn, drastically reducing the circulating supply. This sharp decrease in supply, combined with the explosively growing market demand at the time, triggered a massive rally that delivered astronomical returns to early investors.

This unprecedented surge stimulated follow-up buying from numerous new investors seeking high short-term profits, and SHIB finally reached its historical all-time high of $0.00008616 in October 2021. According to data from the analytics platform CoinGecko, the current Shiba Inu price has plummeted more than 93% from its peak, but many individual investors still hold the asset with the expectation that a large-scale rally, similar to 2021, could be replicated, thus maintaining its high popularity.

However, experts point out that for Shiba Inu to fully recover its past upward momentum, it must overcome cold, realistic barriers. Despite Vitalik Buterin's massive burn, the circulating supply of SHIB in the market still amounts to approximately 589 trillion tokens, and this enormous remaining supply acts as a direct impediment to price appreciation. Analysis suggests that simply conducting additional token burns will not be enough to drive significant price increases.

Consequently, Shytoshi Kusama, the lead developer of Shiba Inu, has clearly stated that mass adoption must precede large-scale burns for the price to truly rebound. Media experts also predict that unless the project can build trust among the general public through practical utility expansion and ecosystem development, it will be difficult to escape the current price stagnation caused by oversupply for the foreseeable future.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*