ETH Whales Are Accumulating Billions of Shiba Inu Tokens. Here’s Why
In 2022, the world’s second-largest meme cryptocurrency Shiba Inu didn’t attain the expected growth due to several market crashes. Nevertheless, recent developments in the Shiba Inu space have given the community assurance and encouragement of better times, despite the heightened volatility.
What has been particularly interesting is the buying activity of ETH whales – investors who hold large amounts of Ethereum. Shiba Inu is a decentralized finance (DeFi) token created on the Ethereum blockchain. Its popularity was through its meme-inspired branding and the decentralized autonomous organization (DAO) behind it.
Is Shiba Inu A Popular Choice For ETH Whales?
Meanwhile, a report from the Shiba Inu Ecosystem has unveiled an update regarding their long-awaited Layer-2 blockchain solution, Shibarium. According to the report, the Beta version of Shibarium should launch in early 2023, and the BONE token of Shiba Inu, known as Bone ShibaSwap, will be the Shibarium’s native token.
The Shiba Inu token has seen a surge in interest from Ethereum whales following a recent announcement that each transaction involving the token will result in its burning. On-chain data from WhaleStats shows that SHIB has become the most traded token among the top 1000 whales, surpassing Wrapped Ethereum (wETH).
Furthermore, a report stated that BlueWhale0159, an ETH whale address, purchased 187 billion Shiba Inu tokens, amounting to approximately $1.5 million within a few hours.
The law of supply and demand states that if the availability of an item decreases while the need for it remains the same, the price will increase. Burning Shiba Inu tokens has reduced the amount in circulation, thus satisfying the first portion of this law.
However, for this law to be effective, the demand for Shiba Inu must remain constant. The recent update from Shibarium indicates that BONE will be the platform’s exclusive crypto asset for transactions.
Therefore, SHIB holders with over 1 million tokens must transact in Shibarium to burn their SHIBs. Sustained burning at high rates is necessary for SHIB holders to earn rewards. Fortunately, it won’t be hard to attain, as ShibaSwap offers a burn mechanism for SHIB tokens.
A Rise In SHIB Prices
Additionally, the upcoming Shibarium layer-2 solution will feature a burn mechanism too, which could increase burning levels. This upgrade will lead to the forwarding of tokens to a dead wallet.
This step can help the community lock in many SHIB tokens, potentially increasing SHIB prices in the future. However, investors shouldn’t be too expectant regarding how much token burning would increase SHIB’s price.
Reducing the circulating supply may act as an impetus for a price surge in the coming years. Still, it’s unlikely that SHIB will reach $0.01 solely due to burning. The SHIB token’s deflationary properties, presence in the DeFi space, and Ethereum blockchain compatibility make it an ideal choice for those ETH whales wanting to diversify their cryptocurrency portfolios.
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