Dogecoin is a cryptocurrency that started as an entertaining joke, but has since made huge gains and losses. The coin dates back to 2013, when it was first developed by software engineers Jackson Palmer and Billy Marcus.
The pair named their coin after a comical misspelling of the word “dog” used in memes surrounding images of Shiba Inu dogs. Despite its joke status, the coin grew to a record high of $0.74 in May 2021. There are many questions about its future value. Can dogecoin reach $1,000 by 2025? Will dogecoin crash? Here’s a look at how the price could develop.
The Current State of Dogecoin
On May 19, 2022, dogecoin stood at $0.08571. That is a long way from its all-time high, with the currency falling sharply to below $0.20 in June 2021. While there has been a small recovery along the way, the price has continued to fall in 2022.
Despite the decline, dogecoin can still be seen as a success story. The coin crossed the one cent mark for the first time in January 2021, years after its introduction. Anyone who bought at the time would still be up more than 700% on their initial investment as of May 12, 2022. Those who bought and sold at the top then won more than 7,000%. The coin traded below $0.01 for years, so some could have made even more profits.
Dogecoin was still the 10th largest cryptocurrency by market cap, at $11.357 billion, on May 19. The 24-hour trading volumes are still high, showing that many people are still buying and selling dogecoin today.
Factors That Could Affect Dogecoin Price Forecasts for 2022
One of the most important things to know about dogecoin is its entanglement with Tesla CEO Elon Musk. Dogecoin’s price action has a history of following Musk’s input on Twitter, with major growth leading up to its all-time high, matching his pronounced support for the coin.
Similarly, a major price drop occurred during Musk’s May 2021 appearance on the comedy sketch show “Saturday Night Live.” When Musk made a seemingly satirical comment in which he referred to dogecoin as a “hustle”, the price started falling from $0.65 to just $0.416.
Some traders believe the link between Musk and dogecoin is as strong as ever, as early reports of his continued takeover of Twitter led to small spikes in the coin’s price. This trend continued with a major spike on April 25, 2022, when Twitter accepted Musk’s offer to acquire the company. However, Musk tweeted on May 13 that the deal was on hold and proceedings have been shaky ever since. What eventually happens with Musk’s takeover of Twitter could have an effect on the price of dogecoin after all.
Dogecoin saw a significant drop from its Twitter-correlated spikes, losing about half of its value between April 26 and May 12. This came as cryptocurrencies crashed across the board and lost significant value, possibly not reflecting specifically on dogecoin.
The Dogecoin usage scenario
Dogecoin differs from bitcoin and many other cryptocurrencies in a number of important ways. For starters, there is no finite limit to the number of dogecoins that can be produced. Bitcoin has such a limit, which plays a role in its widespread use as a speculative investment.
Dogecoin is meant to be less of an investment opportunity and more of a real currency. The coin originally served as a means of rewarding users on social media and other platforms. The practical use of dogecoin as a currency could limit its potential growth as a speculative investment, but could also give it stability.
Dogecoin Price Predictions
Cryptocurrency markets are volatile and difficult to predict, with the turbulence of May 2022 being a prime example. However, some still have an optimistic view of dogecoin and other cryptocurrencies.
One such optimistic prediction comes from noted cryptocurrency advocate Roger Ver. Ver is known for its public support for a wide variety of cryptocurrencies, including dogecoin. He provided some insight into his dogecoin prospects following Elon Musk’s deal with Twitter.
Ver placed dogecoin in its top three contenders for emerging dominant cryptocurrencies, alongside litecoin and bitcoin cash. He specifically pointed to the advantage of dogecoin in both transaction costs and reliability as the reason he prefers the currency.
What if Dogecoin became a dominant cryptocurrency?
Dogecoin is already a strong contender as the 10th-ranked cryptocurrency by market cap as of May 19. However, its $11 billion market cap is much lower than that of the current dominant cryptocurrency, bitcoin, at over $575 billion. Bitcoin makes up 44.97% of the current crypto market, followed by Ethereum at 18.98%. So how much could dogecoin be worth if it became a dominant cryptocurrency?
If dogecoin really became a dominant cryptocurrency and matched the market cap of ethereum, it would be priced around $1.76. If it were to overtake bitcoin, it could have a price of $4.12 or higher.
These prices show growth potential, but are also a sign of where the line could be. Can dogecoin ever reach $100? Probably not. Can dogecoin hit $10 this year? Also unlikely. What will dogecoin be worth in 2023? It’s hard to say.
In a world where dogecoin becomes a leading cryptocurrency, investors could see current investments increase by 5,000%.
What if Dogecoin completely crashes?
Of course, not all cryptocurrencies are success stories. A recent example shows how bad things can go for once successful cryptocurrencies. Between May 5 and May 12, problems with the stablecoin terra caused its cryptocurrency LUNA to drop from $83 to practically nothing. The all-time high was $119.18.
This example shows that with cryptocurrencies no one can say how low the bottom will be. Despite positive dogecoin price predictions from some, there is always a risk that prices could plummet.
Many investors have benefited from investing in Dogecoin, but the future – and the future of all cryptocurrencies – remains uncertain. While there could be more profit on the horizon, every investor should evaluate cryptocurrencies very carefully and invest cautiously.