InvestorPlace - Stock Market News, Stock Advice & Trading Tips
It’s unfortunately that dog-themed altcoin Shiba Inu (CCC:SHIB-USD) is considered a joke by some traders. Sure, Shiba Inu started off as a meme coin, but let’s not ignore the token’s evolution into a much more serious crypto asset.
Source: Jolanta Beinarovica/Shutterstock.com
Perhaps some investors are deterred by the coin’s low price. As we’ll see, it’s far below a penny, or even a hundredth of a penny.
This means that the Shiba Inu token is prone to rapid price swings. Therefore, all positions sizes should be small – please don’t load the boat on this one.
That being said, it’s perfectly fine to accumulate some SHIB coins for their strong growth potential. Plus, they can be useful as a hedge against dollar inflation – a point reinforced by a well-considered token-pool-reduction strategy.
Analyzing the Shiba Inu Price
The first thing to bear in mind is that the Shiba Inu coin price will often follow the path of Dogecoin (CCC:DOGE-USD).
This makes sense, since Dogecoin is the more famous and well-established of the two dog-faced tokens. So, be sure to monitor the price moves of both coins.
Next, there’s no getting around this topic: Shiba Inu tokens are dirt cheap.
Practically anybody can afford to make an investment – heck, you can probably buy a million SHIB coins right now. The price was 0.000704 cents ($0.00000704) as of Sept. 29.
Just to give you a comparison, DOGE was 20 cents on that day.
There was a time, back in May, when the Shiba Inu price flew to 0.003431 cents, or $0.00003431.
So, 0.003 cents could be an aggressive but reasonable price target for the long-term “HODLers” (holders of the coin).
And if your time horizon is long enough, you might envision SHIB getting to a full penny – or zero, if you’re on the other side of the trade.
Coinbase Clout
Some commentators will claim that Shiba Inu’s recent listing on Coinbase Global’s (NASDAQ:COIN) cryptocurrency exchange should be considered the headline story.
I’ll grant that it was a real game changer when Coinbase revealed that SHIB would be available for trading on Coinbase Pro starting June 17.
Coinbase’s Sept. 16 blog posting reinforces this point. On that day, the company made the Shiba Inu coin available on Coinbase.com and in the Coinbase Android and iOS apps.
Clearly, this little coin has come a long way since its launch in August of 2020.
Getting a full Coinbase listing – not to mention tweets from the likes of Elon Musk and Vitalik Buterin – has raised SHIB’s profile and earned it some respect.
The Coinbase clout has also buoyed the token’s price. Simply getting listed on Coinbase Pro caused the Shinb Inu price to soar 28.87% in just one day.
Burning Desire for Higher Prices
In the long run, however, I’ll contend that Coinbase’s influence won’t be the primary catalyst for higher SHIB prices.
Rather, it will be the Shiba Inu token’s value as a hedge against the dollar’s inevitable decline in value.
Remember, the annualized U.S. dollar inflation rate has been 5% or greater for four consecutive months.
While the government continues to print up dollars, Shiba Inu’s developers are taking swift action to prevent the cryptocurrency’s devaluation.
Not long ago, the project’s developers announced what’s known as a coin burn.
This means that a coin holder transfers a portion of his or her assets to a wallet which nobody can access. In effect, this destroys those coins and thereby reduces the cryptocurrency’s total supply.
SHIB started with a supply of 1 quadrillion, but the Shiba Inu team gave 50% of it to Buterin, who burned most of that in a “dead wallet.”
Recently, the token’s developers tweeted that they “have implemented a burn procedure to reduce” the supply.
Moreover, they revealed a $25,000 SHIB burn that has already taken place.
The Bottom Line
Traders should keep an eye out for more coin burns in the near future. In the dynamic between supply and value, less is definitely more.
Sure, it’s possible to own Shiba Inu tokens for their moon-shot potential. After all, a timely tweet could send the price higher instantly.
If you’re not seeking quick gains, though, then you might consider holding SHIB as an inflation hedge.
You’ll have the backing of the coin’s developers, who are serious about keeping the supply under control.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post Coin Burning Strategy Should Get Shiba Inu Out Of the Doghouse appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
