As you can read in any cryptocurrency overview, the Dogecoin cryptocurrency was not conceived as a serious digital asset. The coin was released in 2013 as a parody of the explosive growth of altcoins. Its creators are IBM programmer Billy Markus and Adobe marketer Jackson Palmer. For the logo of the project, they used a popular meme depicting a Shiba Inu dog. After the creation of the coin, the co-founders did not develop their startup in any way. Over time, its protocol found use in the rapid transfer of small amounts of money with low fees.
Today, this is no longer a joke — its value has skyrocketed by more than 8,500% since the start of 2021. Supporters of the project include Tesla CEO Elon Musk, who has named Doge as his favorite cryptocurrency. Musk also called it vernacular and promised to place a physical Dogecoin token on the Moon.
Dogecoin Cryptocurrency Overview
It is a decentralized open-source peer-to-peer cryptocurrency. It allows you to easily make calculations online. Although the token looked like a joke, its blockchain still has its merits. The coin is based on Litecoin and uses the same proof of work technology.
The main feature of the project that has made it so popular today, is a loyal community of supporters. They trade DOGE and also use it as a tip for the content they post on social media.
This altcoin can be used for payments and purchases. You can easily buy and exchange cryptocurrency. However, it is not suitable as a store of value, as it has an inflationary nature. This means that there is no limit to the number of coins that can be mined. There are already billions of DOGE in circulation, which is the reason for its low price.
What Are the Prospects for Dogecoin and Is It Worth Buying?
In May 2021, the price of the crypto asset increased by more than 8,500%, on May 3 it was $0.74. If you had invested $1,000 in this coin on January 1, 2021, you would have approximately $85,000. However, after such rapid growth, the price also fell rapidly — already on May 17, 2021, the cost of the token was $0.21. You can find the current price of Dogecoin on the live charts of the Changelly platform.
It is hard to ignore such profits, which is why many users are considering buying this token in the hope of getting rich quickly. The likelihood that Dogecoin will become a reliable long-term investment is very small. It can be regarded as nothing more than an experiment for fun. If you decide to invest in it, then invest only the amount that you can risk.
Dogecoin was created in 2013 as a joke. Although it has really grown since then, there is no strong foundation under this project. For instance, Bitcoin attracts investors with a limited number of coins — there are only 21 million of them. This increases its value, which is why some experts call BTC “digital gold”. DOGE has 132 billion tokens in circulation. With so many coins available, its value is declining. Besides, many investors are very wary of cryptocurrencies. They are more likely to invest in BTC or ETH than in a speculative asset.
There is also nothing that distinguishes this project from its competitors. Bitcoin has the longest track record and the most acceptance, which gives it a major advantage. Ethereum is the second most popular cryptocurrency after BTC. Its blockchain technology is used for non-fungible tokens (NFTs) as well as decentralized finance (DeFi). This means Dogecoin has no competitive edge in the crypto space. Therefore, it will be hard for it to grow in the long term.
Thus, there is no fundamental basis in Dogecoin that could justify its phenomenal growth, other than celebrity endorsements and internet hype. If you have extra money, you can try to buy some coins — nobody knows what might happen next. However, there are many other more reliable projects for investment.
DOGE Price Forecast for 2022: What Foreign Experts Say
As of February 2022, at $0.13, DOGE has a market capitalization of about $17 billion. If the value increases to $1, the capitalization will be $132 billion. This arrangement is perfectly acceptable. However, $100 for a given digital asset is a pipedream. And that’s why:
- The US GDP is about $21 trillion, while China’s is about $15 trillion.
- With a Dogecoin price of $100 per coin, its total capitalization will be $12 trillion — 80% of China’s GDP, 59% of the United States. This is absurd.
- Therefore, the price of this digital asset will never reach $100.
Some foreign experts and analytical services give the following price forecasts for 2022.
Forecasting service based on WalletInvestor algorithms suggests the following price per coin:
- 2022 — $0.44;
- 2023 — $0.5;
- 2025 — $0.63.
But the price forecast from the cryptocurrency aggregator CoinSwitch is bearish. In 2022, the price will drop to $0.01, and in five years, it will be trading at $0.04.