Why has Dogecoin grown 35% what awaits it in the future?
Bogdan LashchenkoIn 9 years of its existence, Dogecoin has gone through numerous iterations and managed to move from the status of an unknown meme crypto token to a coin that maintains its position in Top-10 crypto assets on the indicator of the biggest capitalization. We want to remind you that there was a moment when Dogecoin surpassed BNB and was in the Top-4, yielding primacy only to Bitcoin, Ethereum and USDC.
In the period from December 26 to November 5 Dogecoin has been able to add about 35% to its value and grow from $0,074 to $0,10. Why is it happening and what will happen to this crypto asset in the future? In this material, we will run through the history of Dogecoin’s success and try to predict further movement of the asset.
What is Dogecoin?
Dogecoin is a rather extraordinary project in its nature. Uniqueness of the token with the DOGE ticker lies in the fact that popularity and high level of capitalization is maintained only by interest of the community. In 2013, Jackson Palmer together with Billy Markus decided to create a cryptocoin based on the Doge meme and, consequently, the token got its uncomplicated name Dogecoin.
Palmer was interviewed by Crikey where he reported about the goals of creation of the token. Therefore, he wanted DOGE to terminate the crypto industry and showed that loads of people earn money doing nothing. Noticeably, the events took another course and instead of deterring attention of investors, the project attracted new people even though a few years later.
Since DOGE appeared, the value of one token was pathetic $0,00030 but then it gradually grew. Till 2021, the coin was unable to overcome the mark of $0,01, however, 2021 became a breakthrough for Dogecoin. The reason for the rapid ascent was all the interest from expressed by the famous multi-billionaire Elon Musk. The founder of Tesla and SpaceX started to agitate the audience to buy DOGE and declare sending Dogecoin “to the moon”. In 2020, TikTok was also promoting the meme token, however, the pump level is hard to be compared with what happened in 2021.
When Elon Musk was asked why he expresses sympathy towards Dogecoin, he enlisted the arguments that refer to the blockchain the project was realized on. In its nature DOGE is a Litecoin forkl and works by the same system. Musk says that the main advantage of Dogecoin is the fast speed of transaction and small commission and it is hard not to agree with him, as DOGE transitions take a few minutes in the worst case indeed and the gas fee is so tiny that you do not even feel it. It is worth mentioning that if one transaction used to be 1 DOGE, in November 2021 a new update came out and decreased the commission by 100 times. Therefore, if you send $1,000 in the equivalent of the token, in this case the transaction cost is $0,001 which is a subject of jealousy for those who like Ethereum.
Elon Musk at Saturday Night Live
Elon Musk was so interested in promotion of his favourite crypto token that he even visited the American show Saturday Night Live where he appeared as the main special guest. The founder of Tesla and SpaceX played in several sketches including a news report with the hyping Dogecoin, where he took the role of the news reporter and said the coin is going to fly “to the moon”. At that moment, by the way, DOGE reached its record and stopped at $0,56, while Saturday Night Live was being aired, Dogecoin quotes climbed up to $0,70. At the same time, the meme token started to decrease and investors began to fix profits actively.
Why is Dogecoin unique? COmparing the token with other crypto assets!
To understand how unique Dogecoin is compared to its counterparts, let’s refer to Top-10 and look at what one or another currency is.At the moment of this material being written, DOGE is on eighth place in the list of crypto assets with the highest level of capitalization.
1 place — Bitcoin
he basement of the whole cryptocurrency universe and the father of the industry that gave a start to the cryptocurrency era. The main digital asset is traded by most traders and numerous investors put their money in it. The cost of one BTC is $17,000, and at peak Bitcoin reached $69,000. The capitalization of Bitcoin exceeds $326,000,000,000.
2 place — Ethereum
The main altcoin that competes with BTC regarding the aroused interest but not in case of the technical progress. Ethereum is mainly in demand due to the boom of non-fungible token that are circulated on the blockchain. Now there emerge more and more alternative blockchains that offer adequate commissions and great speed of transactions, so the situation with Ethereum may falter. The cost of one ETH is $1,250, and the level of capitalization exceeds $153,000,000,000.
3 place — Tether
One of the two main stablecoins on the cryptocurrency market. Tether Limited, who developed the coin, claim that 80% of the asset is ensured by stocks of US dollars. The main idea behind creation of Tether was to provide a crypto alternative of the dollar for traders and investors that will not fluctuate as much as other digital asset and that will be suitable for trading. The value is $1, and the level of capitalization exceeds $65,500,000,000.
4 place — BNB
Binance Coin was made on the Binance Smart Chain and is a native token of the largest cryptocurrency exchange Binance. At the beginning one token was valued at $0,11, and at peak one BNB reached $671. BNB is used for transactions on Binance actively and can be considered as one of the assets for your portfolio. At the moment the cost of one BNB is $287, and the level of capitalization exceeds $46,000,000,000.
5 place — USDC
USD Coin is a digital equivalent of the fiat dollar that was created by Circle. Even though USDC is ensure by the reserved dollar or by other validated investments, it should not be confused with CBDC, a digital currency of the central bank. As well as in case with Tether, the value of the token is $1, while the level of capitalization exceeds $43,000,000,000.
6 place — BUSD
Binance USD is a dollar equivalent that is traded on the crypto platform Binance. Sometimes there are pairs that offer exchange with BUSD, but they cannot offer ones with Tether and USDC, so this currency has special demand for Binance. The cost is $1, the same as in other cases with stablecoins, and the level of capitalization exceeds $22,100,000,000.
7 place — XRP
According to numerous crypti enthusiasts, the coin by Ripple is to change the economy by means of the blockchain that enables fast transactions with low commission. Ripple has been suing with The U.S. Securities and Exchange Commission (SEC) for a long time which, to put it mildly, does not happen often on such a scale in the cryptocurrency world. The cost of one XRP is $0,38, and the level of capitalization exceeds $19,200,000,000.
8 place — Dogecoin
The token is based on the Doge meme. It was created to show that people earn money doing nothing. Logically and tautologically, it is popular only by means of the shown interest. One of the advantages is fast speed of transactions and low commission. Considering periodical pumps with the help of Elon Musk, it may be used as a speculative financial tool for receiving profit. The cost of Dogecoin is $0,10, and capitalization of the token exceeds $13,200,000,000.
9 place — ADA
Cardano is a blockchain system that is characterized by the high level of fault tolerance and is designed to launch smart contracts. Countless decentralized applications were launched on Cardano, and ADA contributes to the development of the DeFi sector. The value of one Cardano is $0,31, and the level of capitalization exceeds $7,900,000,000.
10 place — MATIC
Polygon was created as an alternative solution of Ethereum that was to decrease the speed of transactions and commission for fund transfers. Polygon also develops a branch of non-fungible tokens and corresponding marketplaces. The cost of one MATIC is $0,90, and the level of capitalization exceeds $7,900,000,000.
Having taken a little tour, we can notice that Dogecoin is in Top-10 is a black sheep and unlike its counterparts, it does not represent any technological udea. Nevertheless, the realizations of the meme token based on Litecoin, which by the way took 12 place in the rating of cryptocurrencies with the highest capitalization enabled the coin to gain technological advantages.
All things considered, DOGE is maintained by people’s interest and will lose its value at the moment when the hype around the coin subsides. Otherwise, with all this popularity of Dogecoin right investments can result in decent money.
Dogecoin’s popularity
Elon Musk has been defending the title of the main promoter and fan of DOGE for a very long time. He, as it was mentioned above, agitated people to purchase the coin even via American Saturday night show, and he often said on his Twitter account that the future has a lot in store for the coin.
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We should pay special attention to Twitter as Musk offered administrators to introduce the payment in Dogecoin there. When in 2021 the fast-paced pump of the coin began enabling investors to get 50+ Xs and traders that work with derivative tool — 100+, 200+ and even more Xs, the multi-billionaire was supported by internet shop and other entrepreneurs. The latter added a feature that enabled paying for goods in DOGE, which not only expanded the chances for consumers but also attracted additional audiences.
The founder of Tesla and SpaceX had wanted to buy the social media for a long time and on 28 October Elon Musk closed the deal of purchasing Twitter. Together with that, he managed to realize what he had offered to the administration of the platform. As a result, the new owner of the network was worth $44,000,000,000 and Musk started to implement Dogecoin in Twitter. Now users have to have an opportunity to pay for special features on the platform with the help of the meme cryptocurrency.
What will happen to Dogecoin next?
According to our suppositions, the cryptocurrency token can develop and, as a result, increase its value, however, similar to numerous digital assets, DOGE will get more expensive not as rapidly as we would like it to be. Even during the lengthy crypto-winter, the meme token can gain in value which states huge interest of investors and traders. Meanwhile, the eighth place in the list of cryptocurrencies with the highest level of capitalization may indicate a big amount of money invested in DOGE, which proves the hypothesis about high interest.
This year the active growth fell at the end of October when the information about Elon Musk purchasing Twitter was going around. Amid the deal, Dogecoin also got its reaction. In total, in a short period of time DOGE grew from $0,0595 to $0,12 and after that investors and traders started fixing the profit. By the end of the year Musk can help Dogecoin with another pump. In the following one-two years DOGE may show a great growth due to several factors.
For starters, as it has already been mentioned, the coin is secured by people’s interest and if the founder of Tesla and SpaceX continues promoting the purchase of the coin, people will do it. This is how social media works.
The second factor that contributes to Dogecoin’s growth is that the token can be accepted by Twitter. The more people use DOGE payments, the more capitalization of the token is increasing, and, as a rule — its value.
The third factor is a probability of the chain reaction that can appear around implementation of DOGE into Twitter. Therefore, if users try to use the meme token and feel the fast speed of transaction with low commission, Dogecoin can gain a new wave of followers by the word of mouth method. In return it can lead to increasement of capitalization and cost of DOGE.
The fourth and not the least reason for the coin value going up in the future is the bullish market that is expected in the future. It is not a secret for anyone that after the crypto winter ends there will be a start of the new bitcoin cycle that will pull up lots of cryptocurrencies. Dogecoin will not be an exception. Increase in the market will attract investments and hype around the cryptocurrency industry and therefore it will welcome new faces in Elon Musk’s favorite token.
Therefore, we are waiting for a positive trend for Dogecoin, however, we should understand that if the coin reaches the desired mark of $1, it will not be done in a short time and of course it will be accompanied by massive corrections that will drop out impatient investors.
Speaking about a more foreseeable future, for example, by the end of 2022, the coin is likely to be traded in the range from $0,06 to $0,08. After DOGE added 35% to its value, the coin will go through a temporary decrease to these indicators as we suppose. Every pump is followed by a dump that is caused by the desire to fix profit. We should not forget about Elon Musk’s tweets. If he continues shilling the token, DOGE can go up to $0,12-$0,14, but due to the fact that the multi-billionaire does it not very often, this year is unlikely to bring us new DOGE posts.
As this coin mainly depends on the founder of Tesla and SpaceX, the future of the token also depends on Elon Musk.
Why did Dogecoin grow by 35% in the period from December 26 to November 5?
This question was unanswered till the end our material. The reason can be Elon Musk’s update on Twitter, that eventually contributed to the growth of the price. We cannot say it for sure, however, there were not any loud statements related to DOGE from the owner of the network.
Bogdan Lashchenko – content manager at EgamersWorld.Bogdan has been working at EGamersWorld since 2023. Joining the company, he began fillin the site with information, news and events.