Shiba Inu activated its deflationary mechanism within the last 24 hours, incinerating a total of 6,878,412 SHIB. According to Shibburn, a platform that monitors the meme coin’s burn activities, this represents an uptick of 44.45%.
Shiba Inu price sees short-term uptick
Despite the massive burn, Shiba Inu still has 585,474,878,489,555 SHIB in circulation. This signals the limitations of the deflationary mechanism in reducing overall supply. In principle, burning activities remain the ecosystem’s way of reducing the circulating supply.
The idea is to lower the volume of SHIB in circulation and hope that the price will appreciate in line with the fundamental laws of supply and demand. However, with so much Shiba Inu in circulation, this has not always been the case.
Shiba Inu Burn Chart | Source: ShibburnHence, some consider that the burn mechanism does not really matter, as it mostly fails to yield the expected result. While the figures look good on paper, critics argue that the millions of SHIB incinerated have not created the needed impact on price overall.
They insisted that with over half a quadrillion SHIB left in circulation and burn activity constantly small and discretionary, the action is largely psychological.
The current burn activity has triggered an upward movement in the price. As of this writing, Shiba Inu was changing hands at $0.000005916, which represents a 4.56% increase in the last 24 hours. The meme coin had been sitting at a low of $0.000005655 before the recent burn.
SHIB battles bearish market pressure
It is worth pointing out that not all burn activity even results in a price uptick. Shiba Inu had, in the past, initiated burn exercises without a corresponding price increase.
This highlights the criticism that the deflationary mechanism has faced from a segment of the crypto space.
Shiba Inu has, in the last 365 days, lost over 51% of its price value and currently faces a lack of liquidity.
After several months of downward pressure, SHIB is facing a price test that might determine if the meme coin could post a significant recovery.
Source: https://u.today/shiba-inu-burn-rate-triggers-68-million-shib-removal-from-circulation
