Dogecoin (CRYPTO:DOGE) has been one of many most talked about meme tokens of 2021. And for good purpose — it climbed 15,219% to peak in Might. Its market share has gained a lot that now it is the tenth greatest crypto participant by that measure.
Immediately, Dogecoin is buying and selling at about $0.17. Contemplating its momentum this yr, it could appear extremely potential that the token can rapidly attain $1. However wait, not so quick. It is necessary to do not forget that Dogecoin has additionally slipped 76% from its peak. Let’s take a more in-depth take a look at this well-liked cryptocurrency to see what path it could take sooner or later.
Picture supply: Getty Photos.
From 2013 to right now
Two software program engineers launched Dogecoin in 2013. It began out as a joke one in all them made on social media, poking enjoyable on the variety of cryptocurrencies that stored popping up. However Dogecoin finally attracted customers and buyers — and picked up velocity this yr. The cryptocurrency has develop into notably delicate to feedback made by Tesla CEO Elon Musk. For instance, he tweeted this week about accepting Dogecoin as cost for some Tesla merchandise — and Dogecoin soared greater than 20% in a matter of minutes.
So, we all know that Musk’s phrases can push Dogecoin larger. However are there another components that would do the identical? Proper now, Dogecoin faces two points that stand between it and a a lot larger valuation.
Primarily, Dogecoin does not distinguish itself among the many 1000’s of cryptocurrencies on the market. Gamers like Ethereum, for example, provide a blockchain loaded with decentralized applications — and the potential to reinvent the way in which enterprise is completed in lots of industries. One other instance: A crypto resembling Polkadot makes it simple to switch information from one blockchain to a different. Dogecoin does not provide one thing to set it other than rivals. As a substitute, it is merely a foreign money. It is accepted by a couple of massive names such because the NBA basketball workforce the Dallas Mavericks. However a lot of the 1,900 retailers that take Doge are fairly small.
Dogecoin’s second problem is its provide. A limiteless most coin provide means buyers will not have the sensation that this asset is scarce — and that is prone to maintain again good points. About 14 million Doge are mined daily. Greater than 132 billion are presently in circulation.
A possible $132 billion market worth
Now, let’s circle again to our authentic query: Can Dogecoin attain $1? Immediately, if Dogecoin have been to hit that degree, its market worth would attain $132 billion. That might put it in third place after Bitcoin and Ethereum by way of market worth. Such a place appears unlikely contemplating there are different gamers that supply extra options and real-world utility than Dogecoin. So, I believe Dogecoin might attain $1 provided that the cryptocurrency market as a complete soars in value. Or Dogecoin might attain that degree if it expands into different areas resembling good contracts. And naturally, there are not any ensures that these issues will occur.
I’ve held on to a really small Dogecoin place — one which I purchased as a enjoyable ingredient so as to add to my portfolio. However I would not suggest going all in on this cryptocurrency. It is necessary to recollect Dogecoin is excessive threat. Although cryptocurrency basically is dangerous, there are gamers that supply a bit extra stability — and far higher visibility.
This text represents the opinion of the author, who might disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in all our personal — helps us all assume critically about investing and make choices that assist us develop into smarter, happier, and richer.
