The height of the pandemic during 2020 and 2021 created a host of distortions in the financial markets because the U.S. government and the Federal Reserve flooded the economy with easy money and ultra-loose monetary policy. It led to speculation fever, and the cryptocurrency industry was among the biggest beneficiaries in that environment.

Meme tokens Shiba Inu (SHIB -1.22%) and Dogecoin (DOGE -2.34%) owned the spotlight. At one point, Elon Musk himself became Dogecoin's most powerful advocate, and he still uses Twitter to promote the token today. However, Shiba Inu won the battle for best returns, as it soared 43,800,000% in 2021, crushing just about every financial asset in history. 

As of this writing, Shiba Inu trades at $0.000011 per token and has a total market value of $6.5 billion. Dogecoin trades at $0.08 per token, with a market value of $11.7 billion. But if a rise to $1 were in the cards, which cryptocurrency might get there first?

The answer seems obvious at face value

Shiba Inu and Dogecoin have a lot in common. They suffer from the very same failing -- a complete lack of utility -- and it's why both tokens have plunged more than 85% from their all-time highs. 

A currency can only sustain its value if consumers and businesses are willing to use it for transactions, and that adoption simply isn't there for either Shiba Inu or Dogecoin today. In fact, the number of merchants around the world accepting the tokens as payment total just 739 and 2,145, respectively. Considering there are more than 330 million registered business around the world, uptake has barely left the starting line for these cryptocurrencies. 

All that said, at the height of the speculative fever in 2021, Dogecoin topped out at a price of $0.74, so it was relatively close to $1. Even now, it has a major mathematical advantage over Shiba Inu because it would have to rise just 1,100% to hit $1. Shiba Inu, on the other hand, would have to soar by 9,090,800%.

By that reasoning alone, all signs point to Dogecoin winning the race.

But Shiba Inu has a burn mechanism

The reason Shiba Inu's price is preceded by so many decimal points is because of its enormous supply -- there are more than 589 trillion tokens in circulation. For perspective, Dogecoin's supply totals just 139 billion tokens. 

If Shiba Inu did rise to $1, it would top a market capitalization of $589 trillion, making it the most valuable asset on Earth. That is clearly an impossibility, which is why the Shiba Inu community is trying to reduce supply by burning tokens, a technical way of saying they're removing tokens from circulation.

Shiba Inu enthusiasts can do so in a few ways. The quickest, most effective way is to simply send tokens to a dead wallet, where they can never be retrieved. They can also stream certain music playlists and watch specific videos, where the advertising revenue is used to burn tokens. They can even use an internet search engine called Shiba Search, which, again, generates ad dollars toward burning Shiba Inu.

If the community can burn enough tokens to reduce supply to 139 billion, it would theoretically be on a level playing field with Dogecoin. But that's a 99.9998% reduction -- in other words, most of the 589 trillion tokens would have to be burned. Since just 6.7 billion tokens have been removed from circulation in the past 30 days, investors are on track to burn about 80 billion over the next year. 

At that rate, burning enough Shiba Inu tokens to reach the 139 billion mark would take a whopping 7,365 years!

Dogecoin should be the clear winner, unless...

There is always the possibility neither token ever achieves a price of $1. The circumstances that led to a boom in speculative cryptocurrencies during 2020 and 2021 may never repeat -- after all, the COVID-19 pandemic was (hopefully) a once-in-a-century event. 

Moreover, Shiba Inu and Dogecoin dealt significant losses to many investors when they crashed, so the same investors might be reluctant -- and lack the funds -- to make new purchases in the future. In fact, a survey conducted at the end of 2022 found just 8% of Americans had a favorable view of cryptocurrencies. It points to a lack of trust after a difficult year that was littered with the collapse of high-profile projects like the TerraUSD stablecoin and crypto exchange FTX. 

If perfect circumstances do emerge in the future, Dogecoin is likely to beat Shiba Inu to $1. But my bet is that never happens.