Shiba Inu (SHIB), the beloved meme coin, has experienced a fiery 20% price surge in a single day, propelling it to $0.00002767 with a market cap of $16.29 billion. This dramatic rise can be attributed, in large part, to a recent SHIB burn initiative that’s steadily reducing the token’s overall supply.
The concept behind SHIB burning is relatively straightforward: a portion of the circulating SHIB tokens are sent to a “dead wallet” – essentially an irretrievable address. This permanently removes them from circulation, aiming to create scarcity and theoretically drive up demand. The effectiveness of this strategy was evident during the last SHIB burn event, where a 116% surge in trading volume accompanied a price jump.
It’s important to remember that unlike physical currencies, burning doesn’t involve actual destruction. Here, burning simply refers to sending SHIB to a permanently inaccessible wallet. Interestingly, the SHIB whitepaper didn’t originally mention burning, but it was later adopted as a community-driven strategy to bolster the network’s growth.
The first major SHIB burn occurred in June 2021, with a staggering 50% of the total supply sent to Vitalik Buterin, the co-founder of Ethereum. Since then, the SHIB burn rate has witnessed significant spikes, like the recent 172% increase that coincided with the current price surge.
This latest burning effort eliminated a significant chunk of SHIB tokens: 392 million in the last 24 hours alone, across 18 transactions. When combined with the 449 million burned in the past week, the total supply of Shiba Inu has shrunk to 589 trillion SHIB. This ongoing “SHIB Burn spring,” as some call it, reached its peak on April 14th, with a record-breaking 650 million tokens burned.
SHIB burning holds particular significance for this token compared to others. Unlike most cryptocurrencies, SHIB’s supply isn’t reduced through mining or staking processes. The ongoing burning efforts have already helped significantly decrease the overall supply, exceeding 41% by February 2024.
While the long-term impact of SHIB burning on price remains to be seen, the recent surge underscores its potential to influence demand and investor sentiment. Shiba Inu, once a playful meme coin, is now demonstrating a strategic approach to navigate the ever-evolving cryptocurrency landscape.
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