Cryptocurrencies are still relatively new as far as assets go, but there’s no doubt that they have taken financial markets by storm since the first time they were introduced. The fact that they are so easily accessible (all you need to start trading is a reliable internet connection and a digital wallet) and can provide traders with complete anonymity outside of the reach of centralized institutions has contributed tremendously to their popularity. Although they are quite volatile and price fluctuations are the norm rather than the exception, investors remain interested in them and continue to add cyber assets to their portfolios in increasing numbers.
Apart from the standard cryptocurrencies, several other blockchain-based tokens have appeared as well. Meme coins are perhaps the best-known out of all of them, being digital currencies that are directly inspired by memes and other phenomena pertaining to digital and social media culture. They are much cheaper than other assets such as Bitcoin, Ethereum, or Solana, meaning that investors feel more comfortable approaching them since the potential for financial losses is reduced. Among them, Doge is arguably the most well-known, and its popularity has led to an ever-growing number of investors looking for the latest changes and developments in the Dogecoin price.
What is Dogecoin?
Doge had its initial release eleven years ago, on December 6th, 2013. It is the first meme coin in the world, and, more specifically, the first “dog coin” to ever exist, the one to start a trend that would continue all the way to the present moment and into the future as well. It was originally designed purely as a joke. Its creators, IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer came up with the idea of creating a peer-to-peer digital currency token that could reach a larger demographic than BTC ever did.
The protocol, much like those of other cryptocurrencies, was designed based on that of existing tokens. In Dogecoin’s case, the inspiration came from Luckycoin and Litecoin, both of which use script technology, a password-based key derivation function. The algorithm is entirely proof-of-work, meaning that one party needs to prove to the others that the computational effort has been expended. Miners are unable to use SHA-256 (a type of mining equipment) in order to perform their tasks and must instead rely on FPGA and application-specific integrated circuits, devices that are much more complex to produce.
Price action
Dogecoin’s creators turned out to be right, and the meme coin performed incredibly well right away. On December 19th, 2013, the coin jumped almost 300% during the span of seventy-two hours, with the volume being several billions of coins every day. The growth happened to coincide with the time during which BTC and many other important cryptocurrencies were still reeling following China’s decisions to make crypto investments from Chinese banks illegal. Shortly after that, Doge had to deal with its first major crash when the price crashed by 80% as a result of the formation of large mining pools that were exploiting diminishing computational power.
In January 2014, the total trading volume of Dogecoin surpassed that of all the other crypto assets combined, but the market cap level remained far beyond that of BTC. In the beginning, Dogecoin offered randomized rewards for each block, but starting in March 2014, static block rewards were introduced. During the 2017-2018 crypto bubble, Dogecoin reached its first peak of $0.017, building a market capitalization of $2 billion. The price spiked again in 2020 as a result of a TikTok trend that brought the value of one coin to $1 for the first time in the asset’s history.
In May 2021, SpaceX announced plans for a ridesharing mission to the Moon that would be funded by Dogecoin. In August of the same year, the re-establishment of the Dogecoin Foundation was announced, with the focus set on the community and ecosystem associated with the cryptocurrency, as well as the promotion of the Dogecoin blockchain in the future. Due to increasing attention from Reddit users, dogecoin went up over 800% in the span of twenty-four hours during the first quarter of 2021, a movement that was partially influenced by the GameStop short squeeze event.
American video game retailer GameStop had a short squeeze of their stocks which led to significant financial consequences for hedge funds and sizable losses for short sellers. Dogecoin was also propelled by the endorsement of well-known popular figures such as Snoop Dogg, Gene Simmons, and Elon Musk. In April 2023, Dogecoin recorded another substantial increase after Elon Musk briefly swapped the Twitter logo for the Doge one.
The future
The original proposal for Dogecoin was to have it start with a limited supply of Ð100 billion, significantly more than what the leading digital assets allowed at the time. This amount has been mined in its entirety by 2015, and the limit was discarded to ensure a consistent inflation rate over the future. Right now, most investors are convinced that Dogecoin will continue to grow, and that it is only a matter of time until it reaches the $1 level. The relative strength index and EMA display sideways consolidation, and traders believe that Doge has the potential to surpass $1 in the upcoming months.
In fact, any movement above $0.73 creates the possibility for higher targets during the first two quarters of 2025. Doge follows repeatable target trends based on Fibonacci lines. During the last ten years, every single bull cycle top and bottom have been predicted quite accurately by the 1.50 and 1.618 Fibonacci extensions. Based on these figures, some estimate that the price could go anywhere between $2.90 and $3.60, while others consider the area between $3 and $5 to be very much possible as well after including the law of diminishing returns (the decrease of incremental output in production).
Based on historical performance, some traders believe Doge could reach $10 by the end of the year, while the more optimistic think that a price over $30 is doable as well, and that it would lead to a market cap level of roughly $5.3 trillion, a huge number given the fact that the entire crypto market is currently around $3.5 trillion.
Dogecoin’s reputation as the first meme coin and its celebrity endorsement have done wonders for its price point. If investors want to ensure they remain profitable, though, they must keep in mind that the environment remains quite volatile and that a sturdy strategy remains necessary.
