Is Dogecoin Dead? DOGE Is Down But Not Out

Dogecoin is one of the most popular cryptocurrencies, and has a mainstream appeal that almost no other cryptocurrency has been able to match. 

While the project is known for its humorous approach to the crypto and blockchain space, holding DOGE hasn’t been very fun as of late. The Dogecoin price is down a whopping 90.3% since its all-time high, a drop that’s significantly worse than those experienced by Bitcoin and Ethereum, which are both down about 61% from their historical highs.

While it is true that the Dogecoin market hasn’t seen strong positive momentum since the start of 2023, it’s inaccurate to say that Dogecoin is dead. In this article, we’ll examine both the positive and negative trends that are relevant for DOGE in 2023.

Before we tackle the question if Dogecoin is dead in more detail, let’s quickly refresh our knowledge about this popular cryptocurrency.

What is Dogecoin?

Dogecoin is a cryptocurrency that was launched in December 2013 by Jackson Palmer and Billy Markus. Dogecoin was meant to be a parody of the rampant speculation in the markets for Bitcoin and other cryptocurrencies. Unlike many other projects, which claimed to be developing revolutionary technologies, Dogecoin did not have any major ambitions other than gathering a friendly and enthusiastic community. This is why Dogecoin is often described as a “meme coin”.

The Dogecoin community used DOGE for online tips, and even held several fundraisers ranging from charitable initiatives to promotional campaigns. For example, the Dogecoin community held a fundraiser to build a well in Kenya alongside the Charity: Water non-profit organization.

From a technical standpoint, Dogecoin is similar to Litecoin in many ways, and it also utilizes the Scrypt Proof-of-Work algorithm. In fact, Dogecoin can be merge-mined alongside Litecoin. One notable feature of Dogecoin is that its supply is not capped, as the DOGE supply will keep inflating over time with no upper limit.

Dogecoin’s 2021 bull run

Although Dogecoin has been around since 2013, it took until 2021 for the coin to truly become a major player in the cryptocurrency scene.

Dogecoin’s first big rally came in 2017 and early 2018, when it surpassed a market capitalization of $1 billion for the first time. However, this peak was dwarfed in 2021, when DOGE reached an eye-watering market cap of $84.5 billion. This rally was characterized by Elon Musk’s public support for Dogecoin and a viral social media trend in which cryptocurrency speculators encouraged each other to buy Dogecoin and bring its price to $1. 

Dogecoin came close to the mythical $1 mark, but didn’t quite get there. It reached about $0.73 before the DOGE market saw a major crash that eventually brought the price back below $0.10. 

Dogecoin’s success spawned thousands of other “meme coins” which sought to capitalize on DOGE’s popularity. However, the only other meme coin that has managed to reach a similar valuation to Dogecoin is Shiba Inu, which is sometimes referred to as “the Dogecoin killer”.

The Elon Musk effect

It’s undeniable that billionaire entrepreneur Elon Musk played a huge role in Dogecoin’s historic 2021 bull run. Musk showcasing Dogecoin to his tens of millions of online followers introduced DOGE to an audience that is significantly bigger the crypto investment community. In fact, Musk’s tweets had such an impact on the DOGE markets that a class action lawsuit is accusing him of insider trading.

While Elon Musk isn’t mentioning Dogecoin as frequently as he was during the 2021 bull market, he still appears to be a supporter of the project. For example, in June 2019, Musk tweeted “I will keep supporting Dogecoin”. Then, in April 2023, he temporarily changed the logo on the Twitter website to the image of the Shiba Inu dog that’s featured in Dogecoin’s branding.

Elon Musk’s support is certainly a positive factor for Dogecoin, although it could be a double-edged sword. If Musk were to change his mind on Dogecoin, the negative impact on the DOGE markets would likely be substantial.

Is DOGE dead?

Dogecoin’s meteoric rise to a market capitalization of $84.5 billion was followed by a huge price crash that has brought the DOGE price more than 90% below its all-time high. Even though there have been some price spikes in between, Dogecoin has been in a negative price trend since May 2021, when it reached its all-time high price of $0.73. 

Dogecoin has also been an underperformer in 2023. At the time of writing, DOGE is only up 1.9% on a year-to-date basis. This is a very disappointing performance given that Bitcoin gained 61.4% in the same time period, and Ethereum gained 55.8%.

The Dogecoin crash was hardly unexpected — Dogecoin isn’t particularly innovative from a technological point of view, and is mostly propped up by its community and viral social media trends. The massive scope of the DOGE crash also makes perfect sense given just how quickly the price of Dogecoin increased. 

On April 7, 2021, DOGE traded at a level of about $0.065. By May 8, the price had reached $0.73, which means that the price increased by about 11.2x in one month. 

Despite this crash, it would not be fair at all to say that Dogecoin is dead. In fact, it is the 9th largest cryptocurrency at the time of writing and still commands a very respectable market capitalization of $9.98 billion. 

In addition, Dogecoin is still active in terms of development. The Dogecoin Foundation, which was revived in 2021 with the aim of expediting Dogecoin advancement and safeguarding the Dogecoin reputation, has recently established a fund dedicated to Dogecoin Core development. 

This fund is granting DOGE rewards to developers who contribute to the releases of the Dogecoin Core software, which enables anyone to operate a node on the Dogecoin network. Thanks to these incentives, we may witness an influx of skilled developers joining the Dogecoin project.

Furthermore, there have been discussions regarding the potential transition of Dogecoin to a Proof-of-Stake consensus mechanism. This change would enhance Dogecoin’s ecological friendliness and could also pave the way for new methods of enhancing its scalability.

Dogecoin price prediction for 2023 and 2024

According to the Dogecoin price prediction by the crypto market aggregator CoinCodex, we could see another big Dogecoin bull run in 2024. According to this DOGE price prediction, the coin could even surpass its all-time high in Q2 of 2024.

However, you should keep in mind that it’s very difficult to predict future prices for a highly volatile asset such as Dogecoin. So, Dogecoin predictions can provide some interesting future scenarios but should be evaluated with caution.

The bottom line

So, is Dogecoin dead in 2023? While DOGE is not in an enviable position at the moment, it’s certainly too early to say that it is dead. Historically, the coin has demonstrated the ability to stay relevant, and Dogecoin has outlasted many crypto and blockchain projects that had lofty ambitions and strong investment backing.

However, it is unlikely that we will see any big rallies from Dogecoin unless the cryptocurrency market as a whole goes on a bull run. If this happens, Dogecoin will likely benefit from new users entering the cryptocurrency markets. Dogecoin has a very strong brand and is easily accessible on mainstream-oriented investment platforms like Coinbase and Robinhood, which could put it in a great position if there’s another bull market.

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