Dogecoin has risen greater than 370% to this point in 2024.
On the earth of cryptocurrency, most buyers are speaking about the identical factor: Whether or not or not Bitcoin will go and maintain a value over $100,000 quickly. As of this writing, Bitcoin’s value is hovering round $98,000 — placing its latest milestone mere inches away.
Within the background, one other crypto has skilled a surge of its personal. Enter Dogecoin (DOGE -5.37%), whose value has skyrocketed by 376% in 2024. At a value of roughly $0.43, can Dogecoin’s momentum proceed and propel the token to a value of $1 by the top of the 12 months?
Let’s check out what’s fueling Dogecoin’s value rise, and assess whether or not now is an effective time to get in on the motion.
Looking at Dogecoin’s value motion
Loads could be gathered from the chart under. The primary apparent takeaway is that for a lot of Dogecoin’s existence, the crypto was basically nugatory. For years, the value of Dogecoin was under a penny. Then, in 2021, one thing occurred that fueled the value of Dogecoin to almost $0.70.
Dogecoin Value knowledge by YCharts.
In contrast to mainstream cryptocurrencies equivalent to Bitcoin or Ethereum, Dogecoin is classed as a meme coin. Basically, Dogecoin would not have a lot utility in the actual world as a broadly accepted technique of cost. As an alternative, its underlying “worth” is kind of decided by internet-driven hype — specifically, viral memes.
In 2021, Dogecoin was propelled into the highlight after Elon Musk began ceaselessly posting concerning the crypto on social media and even referenced it throughout his devoted episode on Saturday Evening Reside.
In different phrases, Dogecoin skilled an outsized stage of curiosity because of Musk’s affect and facetious “endorsement” of the cryptocurrency.
What might gas Dogecoin to $1?
Because the chart above clearly exhibits, Dogecoin’s ascent in 2021 was short-lived. Over the previous few years, the value of Dogecoin has hovered round $0.10 — and even with its near-400% return to this point in 2024, the crypto remains to be far off from prior highs. Nonetheless, there might be some catalysts that would gas Dogecoin previous its prior excessive, and even probably make it attain a milestone value of $1 within the close to time period.
The primary catalyst that would profit Dogecoin is a Santa Claus rally. Though the Santa Claus rally is extra of a psychological phenomenon, the broader concept right here is that buying and selling exercise can typically expertise notable upticks towards the top of the 12 months as folks make investments vacation bonuses. They might additionally merely have an optimistic outlook for the market within the coming 12 months and need to take benefit earlier than January comes round.
To ensure that Dogecoin to essentially profit from a Santa Claus rally, I believe the broader crypto panorama should see some rising curiosity. I believe there’s an actual risk of that taking place, which results in my second level.
President-elect Trump was an avid supporter of Bitcoin throughout his time on the marketing campaign path. Whereas that does not have a lot of something to do with Dogecoin, I believe some buyers might interpret the assist for Bitcoin as a optimistic indicator for the crypto panorama basically.
Increasing upon the concept above, needless to say Trump is seeking to create a brand new group in his administration centered on figuring out wasteful or redundant spend within the federal price range to assist scale back the U.S. deficit. The title of that group is the Division of Authorities Effectivity (D.O.G.E.), and it is set to be co-led by none apart from Elon Musk.
I would not be too shocked to see the costs of different cryptocurrencies past Bitcoin begin to witness some heightened volatility as Trump’s inauguration will get nearer and the creation of D.O.G.E. turns into extra of a actuality.
Picture supply: Getty Pictures.
Must you spend money on Dogecoin proper now?
In a manner, I can not assist however discover some humor in Dogecoin’s rising value. Be it 2021 or 2024, the worth of the coin is basically tied to Musk. But regardless of the irony right here, there are some critical factors I must make.
First, it is fairly clear that Dogecoin would not have any precise worth. Its value is set by meme-driven narratives and on-line jokes.
Telling somebody to spend money on Dogecoin as a result of Elon Musk thinks the concept of it’s humorous is like telling somebody to purchase inventory in Nike as a result of a big-name movie star wore its footwear out in public in the future. Even when a preferred movie star was noticed carrying Nike’s footwear at an occasion, nothing has truly modified concerning the underlying fundamentals of the enterprise. At finest, these concepts are tangentially associated — but these affiliations create a way of perceived worth.
The second essential level to make is that Dogecoin is an inflationary token. Which means there may be not a cap on the provision of tokens that may enter circulation. In essence, it is going to take an unprecedented stage of demand to push Dogecoin’s worth larger, since its provide circulation is consistently rising.
Whereas a Santa Claus rally and the upcoming inauguration might signify some near-term tailwinds for the value of Dogecoin, it is important that buyers perceive that neither of this stuff has something to do with the token in a direct sense.
Even when the value of Dogecoin in some way manages to achieve $1 by the top of the 12 months, it is clear that such a motion is rooted in something however sound judgement or underlying fundamentals. I see an funding in Dogecoin as extremely dangerous and would go on it.
