Last updated on May 18th, 2024 at 11:57 am
The Shiba Inu community has continued to burn SHIB massively, however, the price of the tokens seems not to be impacted by the burning events. Several questions have been asked by community members including why the price isn’t moving after “massive” burns. Shibburn – a dedicated Shiba Inu burn tracker project, took to its official Twitter page to explain in length the reasons why this happen.
Why the burns don’t affect the price
According to the explanation, “burns are unlikely to significantly impact the price without continuous and substantial token purchases to match the current purchase rate.” Shibburn stressed that the price of the token isn’t solely determined by burns, stating that if there is no equal demand for that token, then the token holds no value.
Shibburn added that even though the community removes 10 billion tokens from circulation in a week, it will not have any major impact on the price when there are far larger transfers being purchased daily and prices have just sustained.
"It's burning, but price not moving!"
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We wanted to address some misconceptions about burns and price. This applies to $SHIB and many other tokens as well.
A common question that comes our way is "Why isn't the price moving after "massive" burns?" At this moment, burns are… pic.twitter.com/uMuJQubpNO
— Shibburn (@shibburn) July 23, 2023
Furthermore, Shibburn reminded the community about the importance of “supply and demand.” It pointed out that these market forces are the key factor that determines price movements.
Related Reading: Dormant Shiba Inu Whale Burns 77 Million SHIB Tokens in Single Transfer
Shibburn made a perfect example in its tweet,
“if the demand for the token surges, and more people start buying it. As a result, the available supply reduces due to the burning process, creating scarcity. This increased demand and decreased supply can positively influence the token’s price, making it more valuable to traders and investors.”
In addition, Shibburn pointed out that nearly 400 trillion SHIB from the circulating supply are held by the top 100 accounts which are controlled mostly by centralized exchanges.
SHIB price can still surge if there is an increased demand and if individual investors and centralized exchanges continue to accumulate more SHIB, especially in a bull market.
Shiba Inu burn rate decreases
Live data from the Shibburn website shows that the SHIB burn rate has reduced to -69.5% in the last 24 hours. A total of 21,034,242 SHIB tokens have been removed from circulation by the community over the last day. These transfers were done in 12 separate transactions with the last one 4,303,534 SHIB made about 7 hours ago from press time.
Meanwhile, updates from CoinMarketCap show that Shiba Inu (SHIB) is currently selling at $0.0000078. The price is down 0.79% in the last 24 hours. What’s more, SHIB is ranked #18 on the global market chart with a live market cap of $4,586,373,324 ($4 billion).
Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.