Can Dogecoin Reach $1?

In typical fashion, it’s been a very volatile year for Dogecoin (CRYPTO:DOGE). While the cryptocurrency market cap is up 20% overall and currently valued at $2 trillion, the dog-themed token is up just 5% in 2024 (as of August 6).

Dogecoin is trading at a sickening 86% from its 2021 peak price of less than $0.74. But could the cryptocurrency one day reach the psychologically important $1 level, rising more than tenfold from today’s price?

Dogecoin roller coaster

Dogecoin reached its record price in May 2021, when the meme stock craze took over the stock market. This enthusiasm led to a bullish trend in the crypto industry. As one of the most speculative tokens on the market, Dogecoin has benefited tremendously.

But in the crypto market, what goes up quickly often goes down quickly. This is what happens when the price of a particular token is driven by speculative behavior rather than any fundamentals.

For example, the price of Dogecoin has always increased when one of its prominent supporters, Tesla founder and CEO Elon Musk, has mentioned it publicly. There is hope that the social media platform owned by tech giant X (formerly Twitter) could integrate Dogecoin as a potential payment facilitator.

However, all excitement is usually short-lived. This happened in 2024 as well. From the beginning of this year to March 29th, Dogecoin rose by 144%. Since then, it has fallen by 57%. I don’t think there is any reason to believe that this kind of boom and bust price action will change. And that makes it difficult for someone to invest.

Focus on the basics

What would it take for Dogecoin to increase tenfold to reach $1? The answer is simple. There would need to be strong demand for people to want to hold Dogecoin in their portfolios. I’m not sure that would happen in any meaningful way.

Dogecoin was created to be a light-hearted competitor to Bitcoin (CRYPTO: BTC). Dogecoin aims to be a payment network and also runs a proof-of-work consensus protocol. But the similarities probably end there.

Bitcoin has become a legitimate financial asset over the years. Investors find tremendous value in its decentralized nature and fixed supply. Not only is Bitcoin overtaking gold as a popular store of value, but the network is also rivaling the current monetary system.

On the other hand, there are currently 145 billion Dogecoin tokens in circulation. This number increases by 10,000 every minute and there is no upper limit. This could not be further from Bitcoin’s scarcity level. In fact, Dogecoin’s abundant supply makes it difficult for the price to increase significantly. T

The story continues

The community support that Dogecoin has been able to attract is remarkable. It is currently the ninth most valuable blockchain network with a market cap of $14 billion.

However, I believe this is of little to no use. And it doesn’t have many developers working to advance the network. This does not bode well for its long-term viability. Eventually, the market may begin to question whether Dogecoin should even exist.

For someone looking to invest their hard-earned savings in an asset, there are much better options. Digital assets like Bitcoin and Ethereum can cover your crypto allocation. There are even growth tech stocks that can provide a better alternative for investors who like to take on more risk in the stock markets.

I don’t see Dogecoin as a mere investment, nor do I think its price will ever reach $1 per token.

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Neil Patel and his clients do not have a position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Tesla. The Motley Fool has a disclosure policy.

Could Dogecoin Reach $1? was originally published by The Motley Fool