More than two years after the peak of meme coin mania, Shiba Inu (CRYPTO: SHIB) remains a favorite target of crypto investors in search of the ultimate low-cost, high-upside investment. Despite the fact that it is still trading for the unbelievably low price of just $0.000010, many investors remain bullish that Shiba Inu can one day reach the $1 mark.

But just how realistic is that price target? Shiba Inu is still up just 25% for the year amid a sharp crypto rally that has seen the price of Bitcoin (CRYPTO: BTC) soar by more than 150%. So if you are thinking about investing in Shiba Inu, here are two important things to keep in mind.

1. The coin supply problem

Shiba Inu’s stubbornly low price can be traced back to one primary factor: a huge circulating supply of 589 trillion coins. To put that number into context, meme-coin rival Dogecoin (CRYPTO: DOGE) has a circulating coin supply of 142 billion. Ethereum (CRYPTO: ETH) has a circulating supply of 120 million. And Bitcoin has a circulating supply of only 20 million.

Just with these numbers, it’s possible to come up with a general rule of thumb for the crypto market: The greater the scarcity of a coin, the higher the price.

With some elementary-school math, it’s possible to understand why a price target of $1 is so far out of reach. A price of $1 multiplied by a circulating supply of 589 trillion coins gives you an implied valuation of $589 trillion.

That number is unthinkably large when you consider that only a handful of U.S. companies have a market valuation of $1 trillion or more. So are we really going to project that Shiba Inu will be worth 500 times the value of an Amazon or Alphabet?

Image source: Getty Images.

The good news is that Shiba Inu is doing everything it can to reduce the outrageously large coin supply. The primary strategy is known as coin burning, which is the process of sending coins to a dead crypto wallet to permanently remove them from circulation. If you can burn enough coins for a long enough period of time, the thinking goes, you might be able to make a sizable dent in the circulating coin supply.

But, again, basic math shows us how impossible this really is. Even if you burn 1 billion coins per day, it would take 1,000 days to burn 1 trillion coins. That’s nearly three years! And you would still have 588 trillion coins to deal with! It would literally take centuries to bring down the coin supply under 1 trillion.

2. An overcrowded meme coin market

Complicating matters further is an overcrowded meme coin market. When Shiba Inu was launched in August 2020, it was still something of a rarity in the crypto world. Sure, there was Dogecoin, but there really weren’t any other mainstream meme coin competitors. It’s easy to see how Shiba Inu captured the imagination of investors.

Nowadays, it almost seems like there has been a frenzied meme-coin breeding program featuring those lovable Shiba Inu dogs.

For example, there’s Floki for fans of Elon Musk’s pet Shiba Inu named Floki. And there’s DogeElon Mars for fans of Shiba Inu dogs going to Mars with Elon Musk.

All of this makes it very difficult for Shiba Inu to regain its traction with meme coin investors. Arguably, the hottest meme coin of 2023 hasn’t been Shiba Inu at all — it’s been Bonk, which is up a staggering 10,000% this year.

As a result, one of the leading blockchain developers for Shiba Inu recently acknowledged that it’s time to forget about memes and focus instead on the harsh reality of building a working blockchain capable of gaining global adoption.

Should you buy Shiba Inu?

Given the above, it’s hard to see Shiba Inu reaching the $1 mark anytime soon. Quite honestly, it’s even hard to see Shiba Inu reaching the $0.01 mark anytime soon. The math just doesn’t work. And on top of that, Shiba Inu can no longer lay claim to being the most popular meme coin in the crypto market after getting “bonked” this year.

Yes, an extended rally for Bitcoin could help to prop up the price of Shiba Inu in 2024. But looking out over the long term, there are much better cryptos to consider as low-cost, high-upside investment targets.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dominic Basulto has positions in Amazon, Bitcoin, and Ethereum. The Motley Fool has positions in and recommends Amazon, Apple, Bitcoin, and Ethereum. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Original: AMZN Feed: Can Shiba Inu Reach $1?