An introduction to the Dogecoin Price
Dogecoin has always been a favorite in the crypto space ever since it was launched as a joke in December 2013. However, its fame shot to unprecedented levels when it was chosen by Elon Musk as his cryptocurrency of choice in 2021, which propelled its price over 1,000% in a little over a month.
The price of Dogecoin is influenced by other factors aside from Musk’s involvement both in the short and long term. This article examines these factors and how they collectively determine the monetary value of this unique asset.
Dogecoin’s price today
The only place to start with a piece about the price of Dogecoin is, naturally, with the current price of Dogecoin:
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It’s essential to keep in mind that not all sources may have accurate live Dogecoin prices. Our data is obtained from a reputable provider that gathers information from several leading exchanges every few seconds, ensuring that the data is as accurate as possible.
This is not the case for some unreliable sites that only use a few low-volume exchanges, where prices can fluctuate independently of the broader market.
What affects the price of Dogecoin?
Dogecoin’s price can be influenced by both internal factors, such as its design and tokenomics, as well as external factors like adoption and the overall cryptocurrency market. These will be examined individually.
Internal factors
Use case
Dogecoin is a very popular cryptocurrency because of its meme-factor, but does also have a use case. It is accepted by many top stores, such as Newegg, Tesla, SpaceX, AMC Theaters, and Gamestop, for payments.
It is also a great option for crypto casino players, given that it is suitable for micropayments and is cheap to send, while the fact it is decentralized also helps its reputation in this arena.
Unlimited supply
Dogecoin is unique in that it doesn’t have a maximum supply – the number of DOGE in the supply can keep going up and up and up forever. This gives Dogecoin a relatively high inflation rate, due to the number of new coins added to the circulating supply through mining. This will increase over time, and may put downward pressure on the price.
Another issue with an unlimited supply of Dogecoin is that there is no rarity value. This may mean it is not viewed as a scarce digital asset by some investors, who generally prefer finite supply cryptocurrencies such as Bitcoin, because they believe that the scarcity will drive up the value of the token over time.
Network speed
Dogecoin uses a proof-of-work consensus mechanism, which makes it slower to send and receive than other newer cryptocurrencies. If speed and scaling is to become an important part of the future of crypto as expected, then Dogecoin’s antiquated system may see it fall down the pecking order in terms of desirability.
External factors
Big name influencers
More than any other coin, Dogecoin knows the power of the big name influencer. Elon Musk’s adoption of Dogecoin was the catalyst behind its 1,000% move in 2021, but there is another side – if he were to drop Dogecoin, or tweet something unfavorable about it, this would have the potential to crash the price.
Speculation
Dogecoin is no different to other cryptocurrencies when it comes to a bull run – DOGE can run with the best of them. Speculators almost always pile into Dogecoin at some point during a crypto bull market, helping boost the price even more, but it always comes down on the other side.
The wider market
The entire crypto market has a tendency to react to events pertaining to it in an extreme way – good news can send it flying high, while bad news can send it crashing down. This doesn’t even have to affect Dogecoin – if Bitcoin has a bad day it will take DOGE with it, and vice versa.
Can you trust Dogecoin ‘experts’?
The concept of an expert in Dogecoin or cryptocurrency, specifically when it comes to pricing, is a contentious one. Many individuals in the space may have a deep understanding of how Dogecoin functions, but predictions about its price movements are often based on personal biases – supporters of Dogecoin tend to predict a bright future, while critics may forecast its downfall.
It’s important to remember that, as we have outlined, the price of Dogecoin is affected by various factors, and predictions should be taken with a grain of salt.
When considering the price potential of Dogecoin, it’s important to avoid taking advice from those with extreme views, whether positive or negative – those who are overly passionate about Dogecoin may have a biased perspective, and their predictions may not be based on objective evidence.
If you’re looking for a perspective on Dogecoin’s price, it’s important to research the person or entity providing the information to ensure that their opinion is based on tangible evidence, rather than emotions or any financial inducement.
It’s also important to remember that the crypto market, and Bitcoin especially, is now large enough to be affected by the same things that move major global markets, meaning it’s probably better to pay attention to analysts who discuss the financial markets as a whole, and not just Dogecoin.
Experts who talk about the wider market probably won’t talk about Dogecoin itself, but if there are any major events or policy decisions that are impacting global markets, such as central banks raising or lowering interest rates, you can bet they’re affecting the crypto market, and therefore Dogecoin, too.
How does the future look for the Dogecoin price?
Let’s take a look at what has affected the DOGE price in the recent past and what could impact it going forward.
Short term factors
Market cycle
The crypto market is currently in the middle of a bear market, having dropped over 75% since topping out in November 2021. Dogecoin has not been immune, and has in fact been hit particularly hard given how high its price rocketed at the peak of Dogecoin mania. Like the wider market, its price collapsed 75% between November 2021 and July 2022, and we can’t expect its price to rebound until the market does.
Real world events
The crypto world has seen some spectacular collapses in the past 18 months, including Three Arrows Capital, Celsius and, of course, FTX. These collapses have dragged the entire market down, both in terms of price and sentiment, and left many disenchanted with crypto.
Dogecoin has been affected by these collapses and the resultant drop in sentiment, and things won’t start to look up again until the world has moved on.
Global financial situation
The impact of various geopolitical events over the past three years has put huge pressure on many people when it comes to the amount of money they have to spare. To thrive, crypto markets need people to throw caution to the wind financially, and at the moment there is little desire, or ability, for anyone to do that.
When the global financial pressures ease a little we will finally see the crypto markets, and Dogecoin, enjoy some relief.
Long term factors
Popularity
Dogecoin is a hugely popular cryptocurrency, and this popular support doesn’t seem to be on the wane, despite the crypto bear market. It has found a place in the hearts of many, so much so that its price is not really negatively affected by its fundamentally damaging tokenomics.
Some supporters actually embrace the fact it has an unlimited supply (“more for everyone”), and it certainly hasn’t affected its price action. Long live the Doge!
Elon Musk
We’ve already mentioned the influence of Musk as far as Dogecoin is concerned, but his importance is such that it bears repeating. Dogecoin simply would have not got to where it did, both in terms of price and recognition, without Musk in 2021, but his approach to decision making is so scattergun that he could, at any time, just ditch his support for Dogecoin for no reason whatsoever.
Long term Dogecoin holders should consider whether they want to put their portfolio in his hands.
Proof-of-work problems?
One aspect of Dogecoin’s design that could see it come unstuck is its proof-of-work consensus mechanism. This is the most environmentally damaging way of running a blockchain, and European lawmakers recently tried to ban coins based on that mechanism from being sold in the European Union.
The move was voted down, but this can be seen as a shot across the bows. With the cat now out of the bag, don’t bet against the issue being raised again in the future.