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Ladies and gentlemen, welcome to the wild world of Dogecoin! If you clicked on this article, it's likely that one of two things are true about you:
1. You already own dogecoin and you're looking for a dogecoin price prediction after you got caught holding the bag, or
2. You heard about dogecoin from that shady friend of yours who is deep into the crypto market and you're looking to see if dogecoin is a good investment (as far as cryptocurrency markets go).
If either of these are you, then you're in for a wild ride.
First of all, some of you may be wondering, "What is Dogecoin?" Well, let me break it down for you in the simplest terms possible: Dogecoin is a digital currency that's all about having fun and spreading memes. It's like the class clown of the cryptocurrency world, if the class clown survived on Kettle One, menthols and the validation of others.
What Is Dogecoin?
Dogecoin was created in 2013 by software engineers Billy Markus and Jackson Palmer as a way to make fun of the hype surrounding cryptocurrencies. They used a popular internet meme of a Shiba Inu dog as the logo for the currency and named it "Dogecoin" after the meme, making doge the first real meme coin of the cryptocurrency boom. Little did they know, the joke would take on a life of its own and the coin would become a legitimate cryptocurrency with a dedicated community.
You might be thinking, "But wait, isn't Bitcoin the king of all cryptocurrencies? How can Dogecoin even compare?" Well, my friend, let me tell you something. Bitcoin is like the valedictorian of the cryptocurrency world. They're both talented and successful in their own ways, but while Bitcoin is busy getting straight A's and preparing for the future, Dogecoin is out there making everyone laugh and having a good time, smoking in the parking lot and dodging the school's resource officer.
Related: Should I Invest In Bitcoin?
Dogecoin is a decentralized digital currency, just like Bitcoin, but it's built on a different blockchain technology called Scrypt. This means that Dogecoin transactions are faster and cheaper than Bitcoin transactions. Additionally, while Bitcoin has a maximum supply of 21 million coins, Dogecoin has no maximum supply limit, which means that there can always be more Dogecoins in circulation.
Now, you may be wondering, "But how do I get my hands on some Dogecoin?" First, you'll need to set up a Dogecoin wallet (which is like a digital piggy bank for your Dogecoins). Once you've got your wallet set up, you can buy Dogecoin on cryptocurrency exchanges such as Binance, Huobi Global, and BitMart. You can also mine Dogecoin, which is the process of using your computer's processing power to validate Dogecoin transactions and create new Dogecoins. However, mining Dogecoin can be a bit more complicated than buying it on an exchange and it requires specialized hardware and software.
But here's the thing, Dogecoin isn't just a digital currency that you can buy and sell. It's a community. The Dogecoin community is full of passionate and dedicated individuals who are constantly working to spread the word about Dogecoin and push its value higher. They're like a pack of internet-savvy wolves, howling at the moon and driving the price of Dogecoin to new heights. The Dogecoin community is known for its charitable efforts, such as raising funds to sponsor a NASCAR driver and sending the Jamaican bobsled team to the Winter Olympics.
Dogecoin Investment Thesis and Dogecoin Price Forecast
Doge's Volatile Past Performance
However, it's important to note that the value of Dogecoin can be extremely volatile. In previous years, the average price of Dogecoin was as low as $0.003 in November 2020. By May 2021, it had reached an all-time high of $0.64. This means that the value of Dogecoin can change rapidly and unpredictably. It's not uncommon for the price of Dogecoin to fluctuate by double digits in a single day. But this is why you're here, right? Because it's so volatile, that could mean that, long term, doge could shoot up in value and hit a massive price target, funding your millionaire lifestyle of Lambos and hot women, right? Well....
Dependencies on Hype
I was a cryptocurrency watcher back in the heydey of dogecoin, and this was definitely the strangest cryptocurrency to keep your eye on. While Bitcoin and Ethereum had communities around them based on technical achievement, engineering and overall strange behavior by then-head of Microsolutions, Michael Saylor, dogecoin had...Snoop Dogg and Elon Musk.
If you read the above paragraph and wondered "why did dogecoin's price skyrocket from $0.003 to a price point of $0.69 in a matter of months?" the actual major reason is....because Elon Musk was hosting Saturday Night Live. I'm not kidding.
Musk, the biggest proponent of the meme coin, hyped the currency essentially daily to his over 100 million Twitter followers at the time. This pumped the price of doge higher and higher as market sentiment exploded into a bull market the likes of which we've rarely seen. This culminated with Musk being announced as the host of SNL, where many in the doge community thought that he would mention the coin on the broadcast, opening up a new market for doge investors and piling short term money into the project. None of that happened, and the price of doge began to fall...quickly. Eventually, it settled back down to a (relatively) stable level, with the current price of doge hovering around $0.089 per doge token.
My Dogecoin Price Prediction
After everything I've said above, you're still looking for a price prediction on doge? Alright, here it goes: I think that anyone factoring doge into their long-term investment decisions is making a huge mistake, and doge will not hit a maximum value of anywhere near $10 at any point, in any time, ever.
Do not solely trust your shady friends you've made across various social media platforms to drive your financial decisions over the next few years. Here are a few reasons why:
Dogecoin's Unlimited Supply
To understand this, we need to understand the term "scarcity." Scarcity is what happens when there is a finite amount of something, like gold or water. This scarcity is what drives price action in the biggest cryptocurrency, Bitcoin, and why crypto experts still put their money on Bitcoin over anything else. There are 26 million available Bitcoin. That limited supply, countered with rising demand, causes the price to increase. Well, Dogecoin doesn't have that issue. Dogecoin's current supply is: unlimited. It has unlimited supply. Want more Dogecoin? Well, they can just print more! It's like if Jerome Powell discovered steroids for his Federal Reserve money printer.
Related: How the 1% Avoid Crypto Taxes
Dogecoin's Lack of Utility
The other macdaddy cryptocurrency is Ethereum. Ethereum's network is used to power blockchain projects of all kinds, from purchasing platforms to NFT's to smart contracts. Dogecoin? It lacks any sort of utility (other than purchasing Tesla accessories or Dallas Mavericks tickets), so there's no real value there either.
The Insane Dogecoin Market Cap
Finally, let's take a look at market capitalization, also called "market cap." The market cap of an investment like a stock or an entire market is calculated by multiplying the price of the asset by the number of the asset outstanding. Apple, for example, has a market cap of $2.25 trillion and is currently the most valuable company in the world, at time of writing. As for dogecoin, it's currently sitting at a market cap of $12.13 billion at a valuation of $0.089 per coin. So what does that mean?
That means if crypto analysts and investors want to see dogecoin's price rise to $1, the market cap of the token would be around $130 billion. A $10 token would see a market cap of $1.3 trillion, or about half the value of Apple, the biggest company on the planet. For reference, Bitcoin's current market cap is only $438 billion, and the market cap of the entire cryptocurrency market is $1.09 trillion. This means that dogecoin would have to overtake the current market value of the entire cryptocurrency market in order to hit a $10 valuation in the upcoming years.
Conclusion
Look, I can never tell you exactly what to do with your money. I'm not a licesend financial professional, and it's your money! However, I can strongly request that you do not pour your life savings into Dogecoin. A few dollars here and there? Fine, sure, do whatever makes you happy. But please, please do not take out a second mortgage on your home to throw it into a meme coin that could be worth nothing, has no intrinsic value and doesn't even have the technical analysis to back it up. It's important to do your own research, invest at your own risk, and never invest more than you can afford to lose.
