Myths and misconceptions often take root, leading to a distorted understanding of events in the crypto realm.
One such event that has been shrouded in misunderstanding is the $1.7 billion SHIB (Shiba Inu) token burn by Ethereum co-founder Vitalik Buterin in May 2021. A recent thread by SHIB burn portal, Shibburn, aims to set the record straight.
Contrary to popular belief, Vitalik Buterin did not spend $1.7 billion in SHIB tokens to execute the burn. Instead, these tokens were initially allocated to him when the Shiba Inu token was created.
The Ethereum transaction 0xabc68f7d712a1552468331c6ec29f5c112bb500ed5ffa660fe2b5af378921e37 reveals that Buterin transferred 90% of his SHIB holdings to a burn address months after receiving them.
The act of transferring these tokens to a burn address did not inherently drive up the token’s price. A burn address is essentially a digital black hole where tokens are sent to be permanently removed from circulation. While this does reduce the overall supply, the immediate impact on price is not guaranteed.
The astronomical surge in SHIB’s price in May 2021 was not a direct result of Buterin’s actions but rather a consequence of skyrocketing demand. As the token gained visibility and traction, more investors flocked to it, driving up its price.
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Show more +According to Shibburn, the token’s value increased by an eye-watering 46,000,000% since its inception, maintaining a 5x increase since May 6, 2021.
The Vitalik Effect: A Contributing Factor?
While Buterin’s burn didn’t directly influence the price, it’s worth considering its indirect effects. Given that he held half of the total SHIB supply, his decision to burn a significant portion could have contributed to market sentiment. Investors often view such burns as a positive sign of reducing supply, which could lead to higher prices in the long term.
The narrative surrounding Vitalik Buterin’s SHIB burn serves as a cautionary tale in the crypto space, highlighting the importance of accurate information.
While the burn itself did not propel the token’s price, the high demand and potential market sentiment arising from such a significant event played a crucial role in SHIB’s valuation. As the crypto market continues to mature, it becomes increasingly important to separate fact from fiction to make informed investment decisions.
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