Dogecoin was first introduced as a “meme coin” back in 2013.
It was launched by Billy Markus and Jackson Palmer as a joke, jumping on the rampant crypto trend that was spreading like wildfire at the time.
But, while it launched as a joke, many consider Dogecoin a serious investment. Surprisingly, Dogecoin reached a high of 70 cents in 2021, which led many to believe that it’s only a matter of time before it hits the coveted $1 mark.
But can Dogecoin ever reach $1? Or, can it even go beyond?
The Meteoric Rise of Dogecoin
The fact that Dogecoin is still relevant today when other coins like Ethereum, Bitcoin, and even Litecoin all have practical applications is a testament to the speculative culture the crypto market is known for.
Dogecoin launched on December 6th, 2013. A mere 13 days later, its value jumped 300%, going from $0.00026 to $0.00095 in the span of three days. Dogecoin trading continued to rise, and in 2014, for a very brief period, Dogecoin’s volume was actually greater than that of all other cryptocurrencies put together, including BTC.
One of the major reasons why Dogecoin continued to grow in popularity was the consistent interest from Elon Musk, the founder of Tesla and SpaceX. There are now several companies that also accept Dogecoin payments!
In January 2021, Dogecoin skyrocketed, growing by over 800% in a single day, reaching $0.07. This was largely due to increased interest from users on Reddit.
In February 2021, Mark Cuban jumped on the bandwagon, claiming that the Dallas Mavericks would allow people to purchase tickets and merchandise through Dogecoin, which led to another surge, with Dogecoin reaching $0.08.
It was then listed on Coinbase in April 2021, leading to another jump in price, hitting 10 cents on April 14th. Within two days, the price jumped by 400%, going to $0.45. Its market capitalization peaked at $50 billion, and in the very next month, the currency crossed the 50-cent mark.
That marked a 20,000% increase within a calendar year. In May, Dogecoin reached its highest valuation ever, reaching $0.711. However, on the same day, the coin dropped by more than 30%, falling to $0.47 within a single hour. By the next day, it had lost more than $35 billion in market value.
Can Dogecoin Reach $1?
Before we discuss Dogecoin’s potential to reach $1, it’s important to understand Dogecoin’s supply, as that plays an important role in determining demand.
Dogecoin originally started with a supply of 100 billion coins, far greater than any other cryptocurrency at the time. However, by 2015, all Dogecoins had been mined, and it was announced that an additional five billion coins would enter circulation.
Theoretically, this means that the amount of Dogecoins will effectively double in the next two decades. When evaluating whether Dogecoin can reach $1 or go higher, we need to consider two important factors: Dogecoin’s market cap and the overall supply and demand dynamics.
With a seemingly infinite supply, it’s hard to imagine Dogecoin’s price rising substantially. If you look at DOGE’s rise in the past, most of it was fueled by market speculation.
To put things into perspective, 10,000 DOGE is mined every minute. At the moment, there are more than 130 billion DOGE in circulation already, and it’s expected to hit 180 billion by 2030.
Another factor is DOGE’s market capitalization, which is around the $9 billion mark. For the coin to hit $1, that will have to go as high as $80 billion. For that to happen, there needs to be a significant cash inflow into DOGE, which seems highly unlikely.
However, as the global economy begins to recover, there’s always a chance that another Bitcoin bull market may roll around. Since most people who buy Dogecoin generally tend to hold onto it for longer periods than other coins, there’s always the chance of another spike.
While there is a slight possibility of Dogecoin reaching the $1 mark, it seems highly unlikely that it’ll be able to retain its value at that price point. Dogecoin is one of the most volatile cryptocurrencies on the market, with its value being affected by simple things such as a notable tweet or a mention.
How Prevailing Market Conditions May Affect Dogecoin’s Pricing
Since there’s no supply limit, the only way for Dogecoin to reach $1, or go beyond, is when there’s a considerable difference in the amount of money being injected and the coins being mined.
This is difficult because the mining reward is so attractive. Miners get 10,000 coins for each block, which is one of the highest rewards right now compared to other cryptocurrencies.
More importantly, we can’t ignore the changes in the crypto market. The bull run of 2021 is over, and the values of many cryptocurrencies have cratered.
On top of that, spending power has also reduced significantly, so the average person doesn’t have enough additional investment money to put into meme coins like Dogecoin.
Another factor that contributed to the rise of Dogecoin was celebrity endorsements. Every time a prominent person sent out a tweet about Dogecoin, it would cause the value to jump just a bit.
Many might say that Elon Musk caused the spike in Dogecoin’s value, but that is not a sustainable factor. Instead, it’s just one of the many reasons why Dogecoin might never succeed.
There Are Other Meme-Dog-Inspired Cryptos in the Market Now
Back when Dogecoin launched, it was the first and only dog-inspired cryptocurrency on the market. However, that has changed, with others like Shiba Inu Coin gaining popularity.
This means there’s now a lot more choice for people to invest in other meme altcoins instead of just Dogecoin. This further dilutes the market and reduces the chances of people pouring money into Dogecoin.
While there’s a distinct possibility of Dogecoin reaching $1, it seems unlikely based on the crypto market. But, if you’re willing to pour some money into dog-inspired cryptocurrencies, there are many others that you can think about too!
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