$SHIB to the moon? or 2.5x?
Have you ever come out at night and looked at the full moon? You might have noticed that the skies are studded with stars. The European Space Agency estimates we have 100 billion stars in our galaxy. A very large number and quite difficult to imagine, but there’s an even more familiar larger number you might have heard about if you trade crypto currencies. 1,000 Trillion.
1,000 Trillion is the number of Shiba tokens that can be minted. This number is 10,000x the number of stars in our milky way galaxy. Not a small number by any means.
Very large numbers and very small numbers can be difficult for the human mind to perceive. It’s why 1,000 trillion may not seem very large (it is, 10,000 x 100 billion) if written in ink, and why 0.00002869 looks like a very small number. Why 0.00002869 ? It is the current market price of the $SHIB token as at the time of this writing. Since both numbers are difficult to comprehend, let’s use a more familiar one, $12.74 bn USD.
$12.74bn is the current market cap of $SHIB, at the price of 0.00002869. For those new to crypto, the market cap of a token measures the amount of actual USD/liquidity that has been spent to acquire the token. Different people buy/sell at different times, and this either raises the market cap (in buy scenarios) or shrinks the market cap (in sell scenarios). $12.74 billion market cap means that collectively the community has invested $12.74 bn USD on the $Shiba token to get it to its current price of 0.00002869.
If you, like myself looking at the number of zeroes $SHIB has until 1 cent (3 zeroes, meaning it could do 10³ = 1000x), and spotted an opportunity to make 1000X, you would equally have to assume that the current market cap of $12.78 billion must do 1000x, which is a market cap of $12 trillion.
The total value of the crypto ecosystem is currently $2.5 trillion. Thus, to make 1000x on your $shiba token (i.e. 1 cent), the token would need to attract 4.8x the entire amount that has been invested in every crypto token as May 2021.
I do not know how much the total crypto ecosystem would be worth by market cap this time next year, but I can make a guesstimate that whatever it is, it will not be so large as to allow $SHIB hold a market cap of $12 trillion. So perhaps $1.2 trillion (100x?), unlikely. Perhaps $120 billion (10x?), errr there is some possibility. Can we measure this possibility? We can try. (skip this paragraph if you don’t like numbers)
Using Julia Galef’s decision methodology:
First test: 4 balls in a deck, 3 black, 1 white.
Rule: I get $10,000 if I can pick the white ball on first try, or I get $10,000 if $SHIB reaches $120 bn by Dec. Which bet would I rather take?
(Answer to yourself)
Second test: 8 balls in a deck, 7 black, 1 white.
Rule: I get $10,000 if I can pick the white ball on first try, or I get $10,000 if $SHIB reaches $120 bn by Dec. Which bet would I rather take?
(Answer to yourself)
Personally, in scenario 2, I would take the $SHIB bet. But in scenario 1, I will take the Ball bet. This means I believe that there is at minimum a 12.5% chance that Shiba could 10x by December. But I do not believe there is up to a 25% chance it could 10x by Dec.
So I am between 12.5% and 24.99% confident it could 10x by Dec.
Given all these scenarios, one might ask, “what multiple should one expect from the $SHIB token?” I’m 90% confident of a 2x and 75% confident of a 3x.
Thus, I don’t believe holders of $SHIB should expect to go to the moon with this token. A responsible estimation should not exceed 2.5x in the short term. And in the longest term possible, 7–10x. While I recognise that reality loves to shit on articles like this one, it would be truly overconfident to expect 100x from Shiba this year. Maybe in 5 years?
On a final note, the number of tokens is 1,000 trillion. This is ridiculously high. It means the owners of this token expect to milk this token for an entire lifetime of financing, selling nothing else. This is an assumption, of course, but why would anyone make 1,000 trillion of any item if not to have a near-infinite amount of it?
On this note, special shout out to $Akita, $Safemoon, $Safemars, all birds of the same feather as $SHIB.
Invest responsibly!
Follow me and 2 friends, as we journey towards flipping $10.1 (NGN 5,000) to $10,100, on our account on twitter, @mxshroomproject. Send us a DM to get the link to our Telegram community.
