Shiba Inu (SHIB) is back at $0.000014 after a 4.50% increase in the past 24 hours, with the burn rate spiking by 1088%. Typically, an increased burn rate reduces supply and can boost the price.
However, historical data shows that price doesn’t always correlate directly with burn rate spikes. Will this time be different? That remains to be seen.
More Shiba Inu Tokens “Dead” as Returns Improve
The Shiba Inu team’s strategy of consistently burning tokens is aimed at reducing the large supply to drive up the value of SHIB. The burning process involves sending tokens to a dead wallet, permanently removing them from circulation.
In theory, reducing supply should make an asset more valuable. However, for SHIB, this only happens when there is a simultaneous increase in demand. As of now, the Shibburn website shows that nearly 100,000 tokens have been burned, bringing the total burned since inception to 410.72 trillion.
Read more: Shiba Inu — A Beginner’s Guide
The recent price increase of Shiba Inu indicates growing demand, which, combined with a rising burn rate, could further boost SHIB’s value — unless interest declines.
BeInCrypto also examined Shiba Inu’s Sharpe ratio. As one of the widely used metrics to measure risk-adjusted return, the Sharpe ratio shows how good or bad a cryptocurrency remit returns in place for the volatility the asset has. A positive Sharpe ratio suggests a favorable risk-to-reward scenario, while a negative ratio indicates higher risks relative to potential returns.
According to Messari, SHIB’s Sharpe ratio was -5.43 on August 19, coinciding with a price drop to $0.000012. Currently, the ratio has improved to -3.87, signaling that SHIB may be on a path to
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Author: Victor Olanrewaju
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