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There have been numerous predictions from different quarters online that Dogecoin might hit the $1 price by 2025. Will this ever happen?
No one really knows. However, it is simpler to make a more realistic prediction on whether the DOGE price will hit $1. Cryptocurrencies’ price movements have surprised many due to their unpredictability and high volatility.
In the last decade, the value of crypto assets has toppled the $1 trillion mark with DOGE being among the market leaders in valuation.
It would be wise to always remember that DOGE was founded as a Joke coin. Today, DOGE has minor uses other than a speculative asset and maybe a tipping channel. Earlier in the year 2021, DOGE rose to its highest price ever.
However, it has since pulled back by almost 50%. Quite a number of people are already projecting its better days are gone however, there is no scientific way to justify that.
Below is a Dogecoin price movement in the last one year.
From the chart, it is clear there was huge price spike in the last few months. This sudden price rise has been followed by huge pullback that is still in play. To determine if the currency will hit $1, below are the various factors we need to consider.
There are very few realistic uses of Dogecoin today. Created as a peer-to-peer coin, Dogecoin has only succeeded as a speculative asset.
This lack of transactional acceptability dents the probability of it ever getting to higher prices. The only practical uses are tipping and donations.
Little usage and acceptability could be traced to its creation. Dogecoin was created as a meme coin. It was supposed to make fun of the mainstream currencies that were promising to take over the world.
This an indication the currency was never meant to be transactional like its peer Bitcoin.
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A characteristic that has made it difficult for people to take it seriously to date. For DOGE to get to $ 1 and beyond, it must be acceptable across.
People must have the real day-to-day uses of the coin. Merchants must also be convinced to accept it as a mode of payment. To achieve this, there need to be huge infrastructural investments in the supporting technologies so as to make it easier and affordable for the users.
Supply is a key component of pricing, especially in the free market. There are billions of Dogecoin circulating in the market today.
Initially, the supply was open up to 100 billion coins. This would later be capped to 5 billion coins per year. Dogecoin is made as an inflationary currency hence the lack of a supply cap.
Increased supply without corresponding demand is a big hindrance to the growth of the price. Over time, this huge supply could actually be the biggest hindrance in the quest of getting to $1.
This coupled with little use of the coin could deter the coin from getting to the $ 1.
The cryptocurrency industry is becoming competitive by the day. Today, there are hundreds of cryptocurrencies being introduced every year to compete directly with the existing mainstream coins.
DOGE has been fortunate to enjoy the monopoly when it comes to meme coins. However, this changing as another coin (Shiba Inu) has joined the space.
Commonly referred to as the Dogecoin killer, SHIB has positioned itself as an alternative to DOGE. SHIB has borrowed some components of Dogecoin by positioning itself as a meme coin and tapping the name of a dog.
The launch has attracted investors who are now redirecting their investments to SHIB mostly due to the affordability factor and the excitement in the market.
The introduction of SHIB could dilute demand for Dogecoin in the long run. If these competing coins are successful, this could threaten the dominance of Dogecoin minimizing the chances of it getting to $1.
The key advantage DOGE holds over other competing coins is its popularity. This is a major driver keeping its prices high. Support from celebrities and industry leaders including Elon musk, Snoop Dog, and Mark Cuban has fueled its adoption across the board.
There is a lot of positive buzz about DOGE in the market today. This popularity and excitement attracted traders who pushed the demand causing the prices to skyrocket.
Today, a tweet from an industry leader could push the price of Dogecoin by over 20%. This shows how influential these people are in determining the price of Dogecoin.
It is this reality that reminds us we could be a month, a week, or a day away from another bullish wave that could push the price of Dogecoin to $1 and beyond.
There is a group of people who believe dogecoin is a Ponzi scheme. This is because very few wallets hold over 70% of the total supply of dogecoins.
It gives them the power to manipulate the market at will. Am not saying they have; however, we never know about the future. This has been criticized and it is against the key fundamentals of decentralization.
Cryptocurrencies are supposed to operate freely without any individual having the ability to control or manipulate them. Having a few people with the power to control the price by manipulating the forces of demand and supply highly diminishes its credibility as a free and stable coin.
This may keep potential investors away and in the long-term undermine the success potential of the coin.
Based on the above analysis, the path as to whether DOGE will get to $1 is still not very clear. There are many variables to look at before this happens. One of the important routes it could take is having it acceptable as a transactional currency.
So far, DOGE has only succeeded majorly as a speculative asset. Moving it to the next step will require having real uses for the coin.
A fete that could only happen by convincing merchants and users to accept it as a means of exchange. Government policies will also play a big role in the success of the coin.
So far, there has been minimal government interference making the environment for its growth favorable. Having a few people control majority of the coins is detrimental to the long-term growth of the coin.
There has to be more inclusive coin ownership and only then it will become truly decentralized as manipulation chances will be minimized. If these conditions are met, the coin will become more stable and less volatile.
Hence, big investors like hedge funds will be attracted to increase their investments in the coin. In return, this will boost the price of the coin and probably drive it to $1 and beyond.