More than 19 million Shiba Inu (CRYPTO: SHIB) tokens were kicked out of circulation Monday, applying additional deflationary pressure on the popular dog-themed meme coin.
What happened: The burn rate exploded 1734% over the last 24 hours, resulting in a supply squeeze of 19.16 million SHIB tokens, according to Shibburn, the coin's official burn tracker.
As of this writing, about 410.74 billion tokens have been burned, with the circulating supply at 584.37 billion.
Coin burning happens when a cryptocurrency token is intentionally sent to an unusable wallet address to remove it from circulation. This is done to create scarcity and boost its demand and market value.
However, scarcity alone is not enough to raise the price if it is not accompanied by corresponding demand.
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Why It Matters: Interestingly, the massive jump in incineration came despite a 28% drop in transactions on the ecosystem's Layer-2 blockchain, Shibarium.
Note that a portion of transaction fees paid on Shibarium are set aside and burned through an automated burn mechanism. It's worth pointing out that Shibarium clocked the 1 billion transaction milestone earlier in the month.
Speculative interest in the meme coin was low as of this writing, with Open Interest in SHIB futures barely rising in the last 24 hours, according to Coinglass. Additionally, the Long/Short Ratio was below 1, suggesting that a higher number of traders were betting on its price decline.
Whale activity also weakened as the number of transactions valued at over $100,000 fell 9% in the last 24 hours, according to IntoTheBlock.
Price Action: At the time of writing, SHIB was exchanging hands at $0.00001193, down 1.90% in the last 24 hours, according to data from Benzinga Pro. Year-to-date, the memecoin has fallen 45%.
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