What's Going On With Shiba Inu (SHIB) In February 2024

Shiba Inu (SHIB) has been trending downward over the past week, losing nearly 5% of its value. The price went from $0.000009943 to $0.000009492. The downward trend is somewhat in line with Bitcoin, which is down nearly 3% this week. Ethereum, on the other hand, has performed well, appreciating 3.5% in the last week. Shiba’s decline may be the result of the latest consumer price index (CPI) data as well as more tokens getting burned or taken out of circulation. 

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What Happened?

After a strong month, Shiba Inu retraced a bit, losing nearly 5% this week. This may be the result of several events in the market. On Feb. 13, the January CPI reading came in at 3.1%, above the estimates of 2.9%. This data point caused some to rethink what the Federal Reserve may do in terms of rates, as a higher CPI could result in rates being held higher for longer.

Additionally, many investors are awaiting a new burning system for Shiba Inu, which could cause the number of tokens in circulation to decrease at a much faster rate. According to Shibburn, a data aggregator for Shiba Inu, more than 27 million tokens were burned in a single day last week. However, a full system for an automated burn process is yet to be rolled out. All burning is done manually and is somewhat sporadic. Investors could be limiting buying activity as they await more news about the automated burn feature and have more clarity on what the future of Shiba Inu could look like. 

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What Else?

If the Fed holds rates at the current level of 525-550 basis points after the latest CPI reading, it would increase the opportunity cost of holding altcoins like Shiba Inu. As borrowing costs rise, investors may opt for alternative investments that provide higher returns with lower risk, rather than investing in speculative altcoins. 

In terms of the burning program, there have been some days with huge amounts of tokens burned and others with not so much. Because burning tokens lowers the supply and therefore can increase the price, this has caused some heightened volatility on Shiba Inu, which investors may be wary of trading.