Shiba Inu (SHIB +1.39%) is currently trading nearly 93% below its October 2021 peak of around $0.000088. While some investors may expect a rebound after such a steep decline, the reality seems more complicated.
Image source: Getty Images.
Larger cryptocurrencies such as Bitcoin and Ethereum benefit from stronger real-world use and broader investor support. However, even the earlier rally of Shiba Inu has been driven more by hype than by durable adoption or clear long-term catalysts. Hence, any meaningful price recovery will likely depend on whether Shiba Inu can build real-world utility and sustain broader adoption over time.
Excessive supply is pressuring Shiba Inu’s prices
One of the biggest challenges for Shiba Inu is its huge total supply of roughly 589.5 trillion tokens (units of cryptocurrency), with nearly all already in circulation. While about 410 trillion tokens from the original 1 quadrillion supply were permanently removed from circulation by the Russian-Canadian programmer and co-founder of Ethereum, Vitalik Buterin, in 2021, the remaining supply is still so large that it does little to change the bigger picture.
In fact, even if 1 trillion tokens were permanently removed from circulation every single day for a year, hundreds of trillions of tokens would remain. That makes it extremely difficult to meaningfully tighten Shiba Inu’s supply and increase its price.
Shiba Inu’s market cap is only around $3.6 billion (as of April 29). Hence, if the cryptocurrency’s price rises significantly, the market cap would also increase substantially. The massive number of tokens is limiting how much the price can realistically climb, as market cap can grow to unreasonable levels.
However, there is no similar downside constraint. Since supply remains high and there is no strong mechanism for reducing it quickly, even modest outflows of capital can push the price lower. Unlike assets with strong utility or built-in scarcity mechanisms, Shiba Inu cannot offset falling demand.
With investor interest declining and capital increasingly shifting toward other cryptocurrencies, Shiba Inu’s large supply and limited scarcity have made it vulnerable to a slow, sustained decline that could push prices to near-zero levels by the end of 2026.
Today’s Change
(2.25%) $1718.63
Current Price
$78005.00
Key Data Points
Market Cap
$1.6T
Day’s Range
$76094.00 – $78028.00
52wk Range
$60255.56 – $126079.89
Volume
32B
Ownership mix also presents risks
Shiba Inu’s ownership structure also poses a challenge to its price. A significant portion of the supply remains concentrated, with the top 10 wallets holding over 60% of the cryptocurrency’s total supply.
In such markets, prices depend on who is buying and selling at any given moment. Hence, if a few large holders decide to sell, it can quickly add a significant supply and drag the price lower. Since most of the remaining holders are small retail investors with limited capital, their ability to absorb large sell orders is relatively weak.
As prices fall, investor interest tends to weaken even more. Lower investor interest leads to reduced trading volume and liquidity, which, in turn, make the market more sensitive to selling pressure.
Hence, while Shiba Inu is unlikely to disappear overnight, without a meaningful shift in utility or sustained demand, it could continue to drift lower over time.
