The concept of token burns, while simple on the surface, is often misunderstood when it comes to its impact on price. A blog post by Shiba Inu burn portal Shibburn demystifies some of the common misconceptions. The burning of tokens, in essence, is the process of permanently remo...
The concept of token burns, while simple on the surface, is often misunderstood when it comes to its impact on price. A blog post by Shiba Inu burn portal Shibburn demystifies some of the common misconceptions.
The burning of tokens, in essence, is the process of permanently removing tokens from circulation. However, the effect of burns on the price of a token like $SHIB is not as straightforward as one might think. It’s not a simple equation of burn more, price goes up.
For instance, burning 10 billion tokens in a week might seem like a significant move, but it’s unlikely to make a dent in the price when there are far larger transfers being purchased daily. The price of a token is not solely determined by burns. It’s a dance between supply and demand, a principle that has held true for centuries.
The Role of Demand
Imagine a scenario where a new token burns 90% of their supply. It sounds impressive, but without demand for that token, it doesn’t hold much value. If there’s no demand, no amount of burning can prop up the price.
On the flip side, if the demand for a token surges and more people start buying it, the available supply reduces due to the burning process, creating scarcity. This increased demand and decreased supply can positively influence the token’s price, making it more valuable to traders and investors.
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The success of a token doesn’t always mean reaching a specific price, like “$0.01.” It’s about the community, the projects being built around it, and the overall growth of the cryptocurrency space.
Burning does play a role in this. Think of it as if a whale were trying to buy a massive amount of the token’s supply, except this whale will never sell. Those tokens remain locked forever. So, how can that not have an impact?
The Current State of Shiba Inu burn
As of now, the SHIB price stands at $0.00000782 with a market cap of $4,602,723,681. The total supply of SHIB is 579,228,971,966,296, with a burn rate of -24.40% in the last 24 hours. During this period, 27,902,462 SHIB were sent to dead wallets. Eight transactions were involved in sending these SHIB to burn addresses.
These numbers are not static. They change as more tokens are burned, and more people adopt $SHIB. The potential for growth is limitless as long as SHIB remains active, retains community interest, and continues to be adopted.
The burning of Shiba Inu tokens is a complex process with a multitude of factors influencing its impact on price. It’s not just about the number of tokens burned, but also about the demand for the token and the overall state of the cryptocurrency market.
The post Do Shiba Inu Burns Benefit SHIB’s Price? Here’s What Analyses Say appeared first on CaptainAltcoin.