It’s sometimes easy to forget that Shiba Inu ( SHIB -0.52% ) didn’t exist before August 2020. The meme coin came out of nowhere to become the best-performing cryptocurrency last year.
Shiba Inu’s sizzle has cooled down quite a bit in recent months. However, it’s still the fifteenth-largest cryptocurrency in the world with a market cap of nearly $12 billion. Could Shiba Inu hit $100 billion by 2025?
What it would take
Let’s first look at what it would take for Shiba Inu’s market cap to reach $100 billion in less than four years. The digital token would have to soar more than 8x in a short period of time.
Of course, Shiba Inu delivered a return last year that makes an 8x gain look like a piece of cake. However, it’s extremely unlikely we’ll ever see that kind of performance from the meme coin again.
But if Shiba Inu could just recapture its high level from five months ago, it would be a good start. Actually, accomplishing this would require the token to more than quadruple. That would be enough to get Shiba Inu close to the halfway point of hitting $100 billion.
Reaching the goal wouldn’t require Shiba Inu to achieve something that other cryptocurrencies haven’t done. Several altcoins, including Avalanche and Cardana, have generated even greater gains in shorter amounts of time.
How it might happen
Now for the trickier part. How could Shiba Inu pull off climbing to a market cap of $100 billion by 2025? The single most important thing that has to happen is a return to a raging bull market for cryptocurrencies.
The old adage that “a rising tide lifts all boats” is usually applicable in investing. The opposite of that saying is also typically true. It’s very difficult for a cryptocurrency to soar when the market is sinking.
A rising crypto market wouldn’t be enough by itself, though. Shiba Inu would also need several big catalysts of its own.
One possibility that has gained attention recently is the introduction of a burning mechanism in the anticipated launch of ShibaSwap 2.0. A focused burning strategy to reduce the number of tokens in circulation could make the remaining tokens more valuable.
Developers’ plans to build a Shiba Inu metaverse is another potential catalyst that could provide a big boost to the cryptocurrency. Shiba Inu could be in a position to compete against other crypto metaverses including Decentraland and The Sandbox.
Easier said than done
There’s no question that Shiba Inu could hit a market cap of $100 billion by 2025. It’s a big leap from acknowledging the possibility that it could happen to predicting that it actually will happen, though.
For one thing, no one knows how long the current market malaise will continue. The longer it lasts, the less likely Shiba Inu will be to soar enough to reach $100 billion.
There’s also no guarantee that any of the potential catalysts for Shiba Inu that are on the horizon will be sufficient to propel the token 8x or more higher. For example, a lead Shiba Inu developer known as Archangel has cautioned against unrealistic expectations for SHIB burns.
Right now, there are only two cryptocurrencies that have market caps of at least $100 billion — Bitcoin and Ether. It’s hard to envision Shiba Inu attaining the widespread adoption that these cryptocurrencies have in less than four years.
Shiba Inu could still deliver positive returns for investors going forward. But there are other cryptocurrencies more likely to break the $100 billion threshold by the middle of the decade.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.