People within the Shiba Inu community continue to burn tokens daily, causing the burn rate to fluctuate significantly—sometimes by thousands of percentage points. Despite these efforts, SHIB's price has largely remained unaffected. This article explores the reasons behind this phenomenon.
Understanding the Supply-Burn Dynamic
Token burning involves sending tokens to an inaccessible wallet address, effectively removing them from circulation. In theory, frequent burns should reduce the circulating supply. However, data from Messari reveals that Shiba Inu's circulating supply has barely changed since June 2022, dipping only slightly from 589.40 trillion to 589.34 trillion. This minimal change suggests that burns have had negligible impact on overall supply.
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The Circulating Market Cap Equation
The relationship between SHIB's price, circulating supply, and market cap is defined by:
Circulating Market Cap = Price × Circulating Supply
Given the near-static supply, SHIB's market cap decline has been driven primarily by its falling price. Charts from Messari confirm this, showing parallel drops in both metrics. This reinforces the idea that token burns play a minimal role in price movements.
Current SHIB Price Performance
Since mid-April, SHIB has trended downward, repeatedly failing to break past key resistance levels. A recent three-day streak of gains has brought it back to this critical barrier. A successful breakout could propel SHIB toward $0.00001**, but at press time, it hovers at **$0.00000880 (up 0.1% daily).
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FAQs
Why hasn’t SHIB’s price reacted to token burns?
The burned tokens represent an extremely small fraction of the total supply, making their impact on price negligible.
How much has SHIB’s circulating supply changed since 2022?
Messari data shows a decrease of just 0.06 trillion tokens (from 589.40T to 589.34T).
What drives SHIB’s market cap more: price or supply?
Price fluctuations dominate market cap changes, as supply remains relatively constant.
Can SHIB reclaim $0.00001?
A sustained breakout above current resistance could pave the way, but broader market conditions remain a factor.