The price of SHIB is struggling as the flow of money shifts from memes to AI and DePIN utility tokens.

Shiba Inu (SHIB) is currently struggling in its efforts to bounce back in price, a situation that analysts believe is the result of underlying structural challenges, far exceeding the usual market volatility.

According to the latest analyses, the target of raising SHIB to the price of $0.0001 is seen as a “dead end,” stemming from its intrinsic limitations.

Structural Challenges: Huge Supply and Slow Deflation Mechanism

These harsh evaluations are reinforced by on-chain data: The total locked value (TVL) on the layer-2 solution Shibarium has sharply decreased and has continuously remained below the 1 million USD threshold since the beginning of October, reflecting a severe lack of utility and user attraction in the ecosystem.

The TVL of Shibarium throughout 2025 | Source: DeFiLlamaSHIB is facing a core contradiction between its enormous circulating supply and slow deflation rate. Although Shibarium is expected to serve as a token burning tool, reducing the total supply by over 589 trillion tokens, the low TVL indicates that the token burning rate has not yet met market expectations. This stagnation suggests that development efforts have not yielded practical results, failing to drive network activity or increase user participation.

Although the market capitalization of SHIB remains in the billions of dollars, the TVL maintaining below 1 million USD is a clear sign that decentralized applications (dApps) and users have not truly chosen Shibarium at the necessary scale.

Analysts believe that this technical failure is the main structural reason making ambitious price targets like $0.0001 unrealistic. The excessive supply scale requires strong and continuous deflationary pressure that the current ecosystem cannot meet.

Lack of utilities and capital flow shifting to AI/DePIN

Another key factor causing SHIB to struggle is the shift of capital flow in the cryptocurrency market. This capital flow is prioritizing sectors that provide practical value. As the Web3 trend shifts strongly from “meme” to “utility”, SHIB is gradually losing its position against projects that offer real-world value.

The second half of 2025 will witness capital flowing into sectors such as AI compute, exemplified by the shift of Bitfarms and DePIN – projects that generate revenue from data, computing, and enhancing business efficiency. These utility-oriented tokens possess a solid platform, rising above purely speculative factors.

Conversely, SHIB still cannot escape the image of a “meme coin”. The low TVL is clear evidence that Shibarium has not found a prominent, attractive use case. This is a key factor in attracting developers and users from established layer-2 networks.

The prolonged lack of utility has led major investors and smart capital to decide to withdraw from SHIB, shifting to higher growth areas, focusing on real utility.

The resilience of the community and the fierce competitive landscape

Despite facing prolonged structural issues, the SHIB community has shown remarkable resilience. The latest data indicates that the amount of SHIB burned surged by over 42,000% in the past 24 hours, helping the token price rise slightly to $0.00001062.

Capital flows are not only directed towards utility tokens but also target alternative meme projects with strong tokenomics strategies. A prominent figure on platform X stated that “smart investors are shifting to Shib on Base,” citing a supply burn rate of 32.6% and “AI-based utility” as the main driving force.

The increasingly fierce competition shows that investors are currently prioritizing fast and verifiable token burn mechanisms, forcing the original SHIB project to compete directly with newer, more powerful AI tokens and meme coin models.

To maintain its position and bounce back in value, the SHIB team needs to urgently demonstrate real utility and innovation. This requires not only the enthusiasm of the community but also attracting significant liquidity and the participation of developers in Shibarium, thereby affirming the important role of the token in the Web3 infrastructure.

The bounce back of Shibarium's TVL will be the first and important signal showing that SHIB can overcome structural barriers, opening up hope for the revival of the project.

Mr. Teacher