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Dogecoin (DOGE) made huge gains for investors in 2021, but hasn't kept pace in 2022. The original dog-themed meme coin gained newfound attention from Elon Musk, and Tesla now lets consumers purchase Tesla merchandise with Dogecoin on its website. Seemingly more and more retailers are accepting DOGE, but will this trend continue, or is this adoption a product of hype?
And it’s not just Dogecoin making big gains for its investors. Increased participation is pushing the altcoin market higher from all directions. But as the cryptocurrency market blows past $2 trillion for the 2nd time this year, serious investors are asking themselves just one question: How high can DOGE go?
Dogecoin was in the news last year for rising more than $0.69 on the tweets of the ever-eccentric Tesla and SpaceX CEO Elon Musk. Single handedly raising the price of Dogecoin via his own social media presence, the self-proclaimed Technoking of Tesla and prominent fan of the crypto project revealed his own position in Dogecoin and his plans to work with developers to expand the platform.
Unfortunately, a catastrophic fall in Dogecoin’s price (the timing of which correlates strongly with Elon Musk’s appearance on Saturday Night Live) left new investors disillusioned shortly thereafter. But as we watched our gains diminish in real-time alongside the general market, a determined community of supporters held onto their DOGE with diamond hands and added strategically to their positions. And after bottoming near $0.12, DOGE is now following the rest of the crypto markets closely.
Despite the drop from its all-time high, DOGE saw huge gains in 2021. While many Dogecoin supporters will proclaim that the coin will reach $1, this hasn't been achieved yet. Dogecoin will need a resurgence in hype in order to reach the coveted $1 mark.
But what is Dogecoin? And what’s driving these recent gains?
What is Dogecoin?
To some, Dogecoin is just another top-tier cryptocurrency lingering on their favorite decentralized exchange (DEX) or traditional trading platform. Like Bitcoin (BTC) and Ethereum (ETH), many investors purchase this digital asset because of its name recognition alone. But Dogecoin is much more than a flashy meme and click-bait advertising.
Nicknamed the people’s currency for its fast transactions and low fees, Dogecoin has created a name for itself as a leader in the peer-to-peer (P2P) payment space. DOGE is rapidly being accepted as payment by a growing number of companies as adoption of the cryptocurrency becomes more mainstream.
One great way to understand what makes Dogecoin so unique is by measuring it against the largest cryptocurrency by market cap — Bitcoin. While both Bitcoin and Dogecoin operate on independent blockchains with a proof-of-work mechanism powered by mining, Dogecoin has managed to simplify the required work necessary to record transactions, allowing for faster speeds and lower network fees.
Dogecoin Market Capitalization
DOGE is trading hands around $0.14 as of February 2022, and it's following the rest of the cryptocurrency market's downtrend. The current market cap for Dogecoin is resting comfortably above $15 billion as it fights to take marketshare from its main memecoin competitor, Shiba Inu.
When considering the price of DOGE, it is important to consider the company’s market cap to form a realistic picture of the coin's potential. For Dogecoin to reach a dollar, its market cap would need to reach over $100 billion, making it one of the most valuable cryptocurrencies on the market.
Bull Case for Dogecoin
The cryptocurrency market is still in its early stages. As cryptocurrencies become truly mainstream, the $2 trillion market will suddenly seem frighteningly small. When you consider the potential for Dogecoin to motivate participation in this burgeoning industry, its market capitalization may have room to grow.
However, it’s nearly impossible for Dogecoin to surpass a few dollars, so adjust your expectations accordingly. This is due to the large amount of DOGE in circulation (130 billion at the time of writing). For Dogecoin to reach $2, it would need a market capitalization of over $260 billion, which would make the meme currency more valuable than most companies in the S&P 500.
Bear Case for Dogecoin
The oversized influence of celebrities involved in the space has revealed a glaring problem within the market. Large investors and early entrants to Dogecoin have enough power to manipulate the currency in a less than decentralized fashion. Plus, other cryptocurrencies like XLM and ADA have cheaper fees and faster transaction times than DOGE, which could potentially make the meme coin obsolete.
With so much hype around Dogecoin, it’s hard to not acknowledge the possibility of a bubble. Dogecoin has pumped and dumped several times before, and investors should realize the possibility that Dogecoin could fall back to sub 10 cents.
Where to buy Dogecoin
Dogecoin is widely accepted on cryptocurrency exchanges throughout the world. The easiest way to buy DOGE in the U.S. is probably through Robinhood or Webull.
How Long will it Take for Dogecoin to Reach $1?
As new entrants to the cryptocurrency space flood the available exchanges in the coming months, many traders expect Dogecoin to outperform the general market. Based on past performance and the current pace of market expansion, some investors are predicting DOGE to reach parity with the U.S. dollar soon.
While the concept of Dogecoin holding a market cap of more than $100 billion may seem hard to justify for the time being, the community of believers hodling the coin are convinced that it can still go much further.
Where to Store Dogecoin Safely
It is imperative to have a secure wallet for your cryptocurrencies and DOGE is no exception. Whether you need offline storage or solid connectivity for trading, the following recommendations will store your DOGE securely, giving you full control of your digital assets.
Best Hardware Wallet: Ledger
Ledger represents the ultimate in secure offline storage. This sleek device stores your private keys and provides full isolation between your assets and less secure devices, like your phone or computer.
Can You Use DOGE with DeFi?
A wrapped Dogecoin, known as tDoge, has brought Dogecoin into the DeFi space. Investors interested in staking for interest can make returns just for holding the currency on certain exchanges within the decentralized finance space.
Current Crypto Prices
The market has been surging over the past few weeks, with tremendous gains realized by investors in the altcoin space in August 2021. Cardano, a popular alternative blockchain company, has made recent headlines after topping $2. It now sits at $2.17.
Bitcoin is holding onto a base of support, consolidating around $47,000, but losing market share to an exploding class of altcoins. Bitcoin dominance is holding at 44% but trending downward as we watch a number of altcoins like Dogecoin outperform the general market.
Is Dogecoin a Good Investment?
Ultimately, Dogecoin is a payment-oriented cryptocurrency with a fantastic community and creative media presence. It lacks in technicals, as it doesn’t have innovative smart contracts, and it isn’t even the best option for a simple payment solution. While the oversized influence celebrities hold over this altcoin can sometimes be hard to stomach, it might still behoove investors to get in on this mainstay meme coin before the masses discover it (again).
About Micah C. Miracle
Before writing for Benzinga, Micah’s work was featured on a number of ranking news sites, including The Merkle, Global Coin Report and the Crypto Gazette.