Will Dogecoin Hit $1?
In the spring of 2021, meme-stock mania didn't just sweep through the stock market but also took the crypto world by storm, sending Dogecoin's price soaring.
Fast forward to the summer of 2024, and the dog-themed cryptocurrency is now 82% below its all-time high, as investor enthusiasm has significantly waned. Despite this downturn, some of Dogecoin's staunchest supporters believe it can not only return to its previous high but also surpass it to reach the much-anticipated $1 per coin.
Can Dogecoin achieve this? Yes, it can, but only if one critical change occurs.
Following in Bitcoin's Footsteps
Dogecoin was created in 2013 as a lighthearted alternative to Bitcoin. It operates on its own blockchain, a modified version of Bitcoin's code, and has its own crypto coin intended to facilitate transactions. Thus, Dogecoin's primary purposes are as a payment network and a store of value.
If Dogecoin becomes more like Bitcoin, mirroring the larger cryptocurrency's path, reaching $1 shouldn't be an issue. But what needs to change?
Dogecoin has an abundant supply. There are 144 billion coins in circulation, a number that increases by 10,000 every minute with no maximum supply. If developers can find a way to halt the creation of new coins while also burning substantial amounts of existing ones, Dogecoin could become much scarcer. This scarcity could help support a higher price.
The Securities and Exchange Commission (SEC) has hinted that every crypto besides Bitcoin is essentially a security, which is unfavorable as it would raise the regulatory requirements of a digital coin or token. If lawmakers declare that Dogecoin isn't a security, demand should increase because owning it wouldn't be as risky from a regulatory standpoint.
Dogecoin would also benefit from being included in institutional investor portfolios, corporate balance sheets, and government reserves. Bitcoin already enjoys this level of acceptance. Given the massive amounts of capital these entities represent, it could drive Dogecoin's price to new heights.
It's Best to Lower Your Expectations
There is a clear path for Dogecoin to rise sixfold to reach $1 per coin. All it needs to do is progress toward greater adoption in the manner of Bitcoin.
This might give Dogecoin enthusiasts some optimism, but it's crucial to assess the probability of this actually happening. Frankly, the chances of Dogecoin achieving these milestones and reaching $1 are very slim.
One major reason is the significant decline in investor interest in Dogecoin. Google Trends data shows that searches for "Dogecoin" are about 3% of what they were during the meme craze three years ago, even amid a booming bull market for the crypto industry.
As of March 22, the total crypto market capitalization is $2.5 trillion, nearing a new record. However, despite this bullish sentiment, Dogecoin's performance has lagged behind the overall market since the start of 2023. This underperformance is not a good sign for one of the most speculative blockchain coins.
Expecting Dogecoin's trajectory to mimic Bitcoin's is unrealistic. Bitcoin has a first-mover advantage and more robust network effects. The market recognizes Bitcoin's clear edge over Dogecoin. While Dogecoin might experience random hype-driven price spikes, long-term capital will likely continue to flow to Bitcoin.
If you're hoping for Dogecoin to reach $1, it's wise to temper your expectations. If the meme coin ever hits that milestone, it will likely be many years from now.