Dogecoin. Everyone knows the name, but how did this once-obscure cryptocurrency leverage the iconic doge meme to become Elon Musk’s favourite? Or, more importantly, how did it become an asset worth nearly US$12 billion (AU$17.99 billion)?
As of Tuesday April 12, DOGE is trading for US$0.08 (AU$0.14). DOGE is currently down 88% from its all-time-high of US$0.73 (AU$0.96) on May 8, 2021. With a market cap of US$11.3 billion (AU$16.9 billion) DOGE is ranked as the 8th largest cryptocurrency at the time of writing.
A brief history of Dogecoin
Dogecoin (DOGE) is a wildly popular cryptocurrency based on the famous doge meme that first started doing the rounds on social media back in the early 2010s. The coin features an image of a Japanese Shibu Inu dog called Kobasu, which it uses as its logo.
This dog-powered digital currency was originally co-created by two developers, Billy Markus and Jackson Palmer, back in 2013. Interestingly, dogecoin was first conceived as a joke between the pair, seeing it as a project that could help sharpen up their coding skills. Markus and Palmer never imagined that it would be anything more than a light-hearted blockchain parody circulating between cyberpunks in obscure corners of the internet.
However, this all changed when Tesla and SpaceX CEO Elon Musk began posting a number of tweets about the token in early 2019, proclaiming Dogecoin as his favourite cryptocurrency and subsequently sending the price of Dogecoin — as crypto enthusiasts like to say — to the moon.
What is Dogecoin (DOGE)?
DOGE belongs to an especially controversial class of crypto assets known as memecoins. These are also oftentimes derisively called shitcoins by crypto market participants. Cryptocurrencies in general have become infamous for their violent swings in price, typically in response to topical headlines. But memecoins have a very particular fondness for this kind of speculation-based volatility.
As such, DOGE and similar canine-themed meme coins like Shiba Inu (SHIB) & FLOKI have proven to be major head-scratchers for traditional investors. It’s all too easy to poke fun at memecoins for being little more than a haven for degenerate speculation and many see “investing” in these as something more akin to gambling.
However, a quick glance at the lifetime price history of DOGE reveals it has grown a staggering 180,000% since its inception in 2013, leaving thousands of Dogecoin investors laughing their way to the bank.
Does Dogecoin (DOGE) have any real value?
Ultimately Dogecoin has very little in the way of underlying value from a traditional finance perspective. But like many other cryptocurrencies, investors seem happy placing bets on the fact that it will prove useful in the not-too-distant future. It’s also worth noting that both Tesla and SpaceX currently accept DOGE as a form of payment for merchandise and products on their respective websites.
While this real-world use case does set it apart ever so slightly from other meme tokens like SHIB and FLOKI, it’s still important to note that the price of Dogecoin only grows in value because of speculation, hype, FOMO (fear of missing out) and the erratic tweets of Elon Musk.
This is why it’s crucial to remember that, while some lucky investors have achieved genuinely legendary returns from DOGE and other meme coins, the chances of making any life-altering gains by purchasing Dogecoin moving forward aren’t exactly stacked in favour of the everyday investor.
If investors are willing to gamble on the chance that Elon will continue to post on Twitter about the token, or that a positive rumour about DOGE goes viral, then there may be some short-term ROI in it . But that’s not exactly a sound investment strategy.
Dogecoin (DOGE) Price Prediction 2023
Due to a strange mix of speculation-based movements in Dogecoin’s price contrasted with Elon Musk’s obsession with the token, analysts and experts remain divided on DOGE’s long-term price prediction.
If we use technical analysis to predict DOGE’s performance for the remainder of this year, the general outlook is relatively shaky. From a technical standpoint, DOGE’s total trading volume is extremely high, and its RSI continues to increase (which means that Dogecoin is becoming more overvalued). So, it seems likely that buyers may quickly turn into sellers if external market conditions begin to sour.
With that in mind, much of DOGE’s price action comes solely from Musk’s tweeting, so if he decides to announce that DOGE can be used for payments on Twitter (for example) it’s likely that the price of the token will continue surging upwards.
According to Jonathan Morgan at FXStreet, Dogecoin looks set to grow in value in the short-term, with Morgan predicting that DOGE may yet be primed yet another for short-term rally of over 40% from its current price to US$0.16 (AU$0.24). However, if the necessary market conditions aren’t met DOGE could fall even back to a support level at US$0.10 (AU$0.18).
Dogecoin (DOGE) Price Prediction 2024
Owing to a lack of any legitimate valuation methods, it is almost impossible to make any accurate long-term predictions about Dogecoin or any of the other speculation-based meme coins.
The automated forecast from Wallet Investor is firmly pointed towards some significant losses in the future and predicts that DOGE will gradually decline to US$0.017 (AU$0.026), a brutal 99% decrease from its current price by this time next year.
However, analysis from DigitalCoin is far more optimistic, suggesting that the price of DOGE could reach a maximum price of US$0.24 (AU$0.37) by this time next year, gaining a respectable 78% from its current price.
How to buy Dogecoin
Owing to Dogecoin’s international popularity, DOGE can be purchased at every major cryptocurrency exchange, including Binance, Coinbase and Crypto.com. Once again, because of its size and relevance to the cryptocurrency ecosystem at large, theres very little difference in price or fees between major exchanges when it comes to purchasing Dogecoin.
Final thoughts on Dogecoin (DOGE)
Dogecoin remains an extremely risky digital asset (even by crypto standards) that has little in the way of genuine underlying value. Ultimately, its value is based largely on continued speculation that Elon Musk may one day do something more with the token.
Unless you’re a technical trader who understands how to accurately interpret short-term price signals, investing in Dogecoin and other memecoins should be treated as a tiny step up from gambling.