It's safe to say that 2023 has not been the year of the meme coin. The world's two most popular meme coins -- Dogecoin (DOGE 3.97%) and Shiba Inu (SHIB 0.93%) -- are both down for the year, at a time when Bitcoin (BTC 1.14%) is up almost 110%.

And yet, Shiba Inu investors continue to hold out hope that the dog-themed meme coin, now trading at the unbelievably low price of $0.000008, still has the potential to hit the $1 mark. For that to happen, a lot needs to go right. Here's a closer look at three key catalysts and their chances for success.

1. Bitcoin's rally

This might sound cynical, but the easiest path to success for Shiba Inu is simply hitching a ride on the Bitcoin rocket ship. Remember, we're talking about meme coins here. If you believe that Bitcoin is poised to go on a huge rally in 2024, then Shiba Inu could go along for the ride.

Arguably, this is what happened back in 2021, when Shiba Inu dramatically skyrocketed in value. Nobody really cared what Shiba Inu did or what value it offered. All they cared was that crypto -- led by Bitcoin -- was seemingly headed to the moon. 

The only problem is that, in 2023, Shiba Inu appears to have decoupled from Bitcoin. Simply put, the latest data now shows that Shiba Inu and Bitcoin are negatively correlated. When Bitcoin goes up, Shiba Inu goes down.

So I wouldn't hold your breath waiting for another Bitcoin rally to lift Shiba Inu higher. If anything, a Bitcoin rally might actually send Shiba Inu lower.

2. Utility coin transformation

Another potential path to success is for Shiba Inu is its transformation from a pure meme coin into a "utility coin." When a cryptocurrency has utility, you can do more than just hoard it and hope for potential gains. It means, for example, that you can use it as a form of payment at real-world stores or use it to mint new non-fungible tokens (NFTs).

One big step in this direction was supposed to be the launch of Shibarium this summer. Shibarium is a Layer-2 scaling solution, meaning that it helps to lower fees and boost transaction processing times on the Shiba Inu blockchain.

Layer 2 solutions are already popular with Ethereum (ETH -0.83%), so the thinking was that a Layer 2 for Shiba Inu could be a huge value add. It was supposed to usher in a brand-new era of Ethereum-like functionality in areas ranging from NFTs to decentralized finance.

And, while there has been some progress on this front, a lot seems to be just hype and buzz. There was a major snafu during the August launch, and controversy has surrounded Shibarium from the very start. Thus, I'm still far from convinced that Shibarium is the answer.

3. Burn rate

In the crypto world, coin burning is a popular way to reduce the supply of a certain coin. By sending coins to a dead blockchain wallet, you can remove them from circulation. The more you reduce the supply of a coin, the more it should help to push up its price. It's just simple supply and demand.

For that reason, the Shiba Inu community has been on a major coin-burning initiative to reduce coins from circulation. And, from a purely mathematical perspective, it is impressive how many coins can be removed from circulation on a daily basis. In October, 250 million coins were removed in a single day.

But here's the thing: The current supply of Shiba Inu is so huge that no amount of coin burning is really going to work. Even if you burn 100 million coins per day (that's five times the total existing supply of Bitcoin each day), it would take you 10,000 days to burn 1 trillion coins.

But that would still be a drop in the bucket, given the current  supply of 589 trillion coins. Even after nearly 30 years (i.e., 10,000 days) of hard work, you would still seemingly be no closer to the end goal of bringing down supply and boosting prices.

Should you buy Shiba Inu?

While there are several paths to success for Shiba Inu, all of them seem to face long odds. And in the case of the coin-burning strategy, the odds of success are almost mathematically impossible.

And so, for that reason, I'm out on Shiba Inu. The chances of reaching $1 are just too slim, and there are better crypto investment prospects elsewhere.