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Dogecoin has risen to $0.20 after Elon Musk tweet announcing Tesla will start accepting some payments through Dogecoin
Dogecoin and Elon Musk have always had a strong relationship with the latter openly supporting the coin. DOGE is a transactional cryptocurrency that was created in 2013. Since, then, the coin has experienced tremendous success to become among the largest cryptocurrencies in the market.
It is named after the famous Japanese dog breed. The coin was created as a meme coin for comic purposes on the crypto market. However, it has evolved over the years to become a transactional coin in the market.
Elon Musk is currently the richest man in the world and the CEO of tesla. He is famous for his ability to influence the crypto markets.
Although he has influenced other currencies as well, Dogecoin has clear leadership.
Dogecoin Price Movement
The price of DOGE had a 15% rally after the announcement. This came after a long period of selling since it hit an all-time high last year.
There is an expectation this gain could trigger a new bullish momentum. DOGE is famous for the huge price rallies that have made it gain a large number of investors.
Since hitting the high of $0.20, the coin has since lost some momentum as is currently trading at $0.18. Most analysts are predicting this could be a pullback before the bullish momentum continues.
Challenges Facing Dogecoin
Although this announcement has brought some optimism in the Dogecoins future as a transactional coin, it still has a long way to go before achieving mainstream acceptance.
Unlike other cryptocurrencies that have quickly adopted other uses such as the development of NFTS, DOGE is yet to diversify. Hence, this could make it uncompetitive and derail its efforts of becoming a top mainstream cryptocurrency.
Transacting in cryptocurrencies remains expensive and slow making them uncompetitive in comparison to the traditional payment competitors such as cash. Without affordability and speed, users will remain skeptical about using them.
There is a group of investors who believe meme coins such as DOGE are fraudulent and will fail in the long term due to the lack of utilization.
Although this could be untrue, it remains an element preventing some investors from putting their money in the coin.
Hence, the coin must do more to gain market confidence if it is to continue with its earlier meteoric rise.
DOGE is facing increasing competition from its fellow meme coins that are more versatile and innovative. Some of these include the top competitor, as known as the Dogecoin Killer, the Shiba Inu coin.
At its launch, Dogecoin was among the few coins in the market but didn’t take advantage of that lead to position itself. Over time, tens of similar coins have come up taking the market away from DOGE.
This has the potential of limiting its growth from reaching its full potential.
However, with the support of industrial influencers such as Elon Musk, you can never rule the coin out.
An increase in market awareness and crypto demand will be key for its growth as more people invest in the cryptocurrency market.