How Much Could This Catalyst Boost Shiba Inu in October?

Shiba Inu (SHIB 1.04%) was the star performer of 2021, not just in cryptocurrency, but across the financial world as a whole. It made history with a gain of 43,800,000% for the year, which could have turned you into a millionaire for the price of a cup of coffee — if your timing was perfect.

But 2022 hasn’t been so positive. In fact, the price-per-Shiba Inu token has plunged by about 69% for the year so far. There’s a long list of reasons for the pivot in investor sentiment, including a broad sell-off in high-risk assets and the fact that Shiba Inu has failed to garner mass adoption. 

The community is working on several initiatives to help resurrect the token’s value, but nothing has made a material impact thus far. But if there’s one thing that could drum up some momentum this month, it’s the release of a particular new game on Oct. 6.

Image source: Getty Images.

Enter Shiba Eternity

The new game is titled Shiba Eternity, and it will be available on mobile devices through Apple‘s App Store and Alphabet‘s Play Store. It’s a collectible card game (digital cards, of course), which will allow players to battle each other in a concept not dissimilar to other card-based games like Yu-Gi-Oh! or Pokémon.

Each player will be granted a Shiboshi — a digital Shiba Inu dog-like avatar — which they’ll need to protect from incurring damage in each clash. The general structure of the game could allow for competitive tournaments in the future and the chance to win prizes. 

Owning Shiba Inu tokens isn’t a requirement to participate, but there is hope the game becomes popular enough to generate some interest in the token that started it all. However, Shytoshi Kusama, who is considered the lead developer of Shiba Inu, recently revealed that 5% of the proceeds earned from the game will be burned — a mechanism that removes Shiba Inu tokens from circulation forever. 

The burn is Shiba Inu’s last shot at redemption

Shiba Eternity is just the latest in a series of interactive, entertaining ways to reduce the number of Shiba Inu tokens in supply. Why? Because right now, there are over 590 trillion of them which is hindering its ability to appreciate in value. One Shiba Inu token costs just $0.000011 to buy as of this writing, and it would be virtually impossible to reach a more typical price of $1, for example.

If that were to happen, Shiba Inu would have a total value of $590 trillion, making it the most valuable asset in the entire world. Not even the most bullish investors consider that to be a likely outcome. 

Therefore, the only way the token could reach a level like $1 is by significantly reducing the number of them in circulation, though roughly 99.9998% of them would have to vanish to make that a reality. The community can help the burn initiative by simply sending Shiba Inu tokens to a “dead wallet,” or they could transact with a participating business like the Shiba Coffee Co., which burns a portion of its profits.

But in any case, at the current average daily burn rate, it could take thousands of years to remove enough tokens to generate a meaningful price boost. And even if it happens, it won’t actually result in an increase in value for investors because they’ll simply own fewer tokens with a higher per-token value, leaving their net position the same.

That’s not the only challenge facing Shiba Inu

The list of hurdles Shiba Inu has to clear for a recovery continues to grow. Neither consumers nor businesses have adopted the token as a means of payment in any real capacity, with just 659 merchants worldwide accepting it in exchange for goods and services. If people can’t use a currency to buy the things they want, then they have no reason to invest in or hold it.

Plus, a myriad of new regulations could be on the horizon, which will make investors much more apprehensive about owning cryptocurrencies in general. Just this week, world-famous influencer Kim Kardashian was accused by the Securities and Exchange Commission (SEC) of promoting a cryptocurrency using social media without disclosing that she was paid to do so. She was hit with a fine of $1.26 million and won’t further promote any tokens for at least three years.

A crackdown on promotional marketing could hurt awareness campaigns for new initiatives driven by the Shiba Inu community. 

But that’s not all. Many cryptocurrencies will now be classed as securities, meaning exchanges and brokers will have to abide by strict audit and compliance rules, which will increase the cost of trading for all investors. Those same dealers must report their clients’ trading activity to the Internal Revenue Service (IRS) from 2023 onwards, so investors may have lost the ability to remain anonymous and will be liable for taxes every time they sell, exchange, or spend their tokens at a profit. 

What does all of this have to do with Shiba Eternity? Well, the game might spark some enthusiasm among the Shiba Inu community, and it may even draw some new investors to the token upon launch this month, but it’s unlikely to lead to a sustained recovery in the long run.