Is Dogecoin Dead?

Dogecoin is one of the crypto industry’s most popular coins, however, it has underperformed relative to other meme coins. That said, Dogecoin’s developers are still active and the coin still plays an important role in the blockchain ecosystem.

Key Takeaways:

  • The first meme coin to gain widespread popularity, Dogecoin (DOGE) is backed by many celebrities such as Elon Musk.
  • Dogecoin is certainly not dead and has a strong community with ongoing development.
  • A top 10 cryptocurrency by market capitalization since February 2021.
  • Dogecoin's market value ($8.9B) is double the size of the next competitor meme coin Shiba Inu ($4.3B).

Dogecoin has long been the crypto industry’s most popular meme coin – in terms of social status, market cap, and active community. However, since the cryptocurrency’s meteoric rise in 2021, the price of DOGE has steadily declined. The original battle cry of Dogecoin enthusiasts, “DOGE $1 dollar”, now seems a long way away. However, does this mean that Dogecoin is dead? This guide will explore the history of Dogecoin, its current development status, and analyze its potential price movements in the future.

Is Dogecoin Really Dead?

While the list of dead coins continues to grow, Dogecoin’s impact extends far beyond its price performance as the first major meme coin. First-to-market products tend to outperform newcomers, even as the competition from other meme coins continues to get more complex. Therefore, Dogecoin will likely be remembered fondly for as long as the crypto sector survives.

Moreover, from February 2021 to the time of writing, Dogecoin has stayed within the highest ten cryptocurrency projects by market capitalization. Therefore, Dogecoin is unlikely to completely die as long as there is a strong community presence backed by celebrities such as Elon Musk who owns Dogecoin and will not sell it.

Elon musk and dogecoin
Elon musk and dogecoin. Source: newsbtc.com.

Dogecoin is a legacy cryptocurrency, almost as synonymous with the industry as Bitcoin and Ethereum. In spite of the coin’s poor performance since 2021, Dogecoin has consistently maintained its place in the top 10-15 assets by market cap. Even as a digital currency that isn’t always endearing to institutional traders, Dogecoin still regularly sees 24h trading volume of 200+ million.

Beyond this, Dogecoin is far from the only cryptocurrency to have struggled through the crypto winter of 2022-3. Very few assets have performed well – even BTC dropped more than 50% from its peak in 2021. How DOGE’s value moves with the next crypto bull run will give investors a better picture of its long-term potential.

How Dogecoin Could Fail

While Dogecoin is unlikely to fail and join the list of dead coins, there are several factors that could impact its survivability and lead to a decrease in community support and associated market capitalization. These include strong competition with better token metrics for price appreciation, a lack of development, and reduced media attention from crypto influencers and celebrities.

1. Dogecoin is built on speculation and hype

Dogecoin is a meme coin, which by nature, has very little utility. Its designation as a low-value tipping alternative for message boards has been usurped by native platform currencies like Reddit Gold. In general, Dogecoin’s primary use case is largely ignored. Therefore, the value of an asset like DOGE is almost entirely driven by speculation and sentiment.

Coins with similar characteristics can struggle substantially during bear markets like cryptocurrency (and other traditional markets) experienced between 2022-23. As hype is muted, institutional investors tend to move away from speculative assets and into safer, defensive ones like Bitcoin, bonds, or cash.

2. Competitors

Meme coins tend to operate more like “fads” than other assets given their limited utility. One coin will be hyped for a while then fade into the sunset, only to be overtaken by the next popular internet meme. This has no doubt affected Dogecoin’s popularity since the events of 2021.

Take Shiba Inu, for example. This coin is a direct competitor to Dogecoin, even referencing the exact same internet meme. However, SHIBA is built on the more popular Ethereum blockchain, giving the cryptocurrency far greater potential for utility. Shiba Inu can be used in DeFi as a yielding asset and even has its own decentralized exchange, ShibaSwap. However, Dogecoin remains twice the size of Shiba Inu in terms of market cap at the time of writing.

Top meme tokens by market cap. Source: Coinmarketcap.com
top meme tokens by market cap

Additionally, newer meme coins like Pepe the Frog (PEPE) and Dogelon Mars may not have any long-term staying power in the industry, but their short-term rises directly take investment away from Dogecoin. Given the overnight success of many of these meme coins (often rising hundreds of percent in 24 hours, only to lose it all within 48) hundreds continue to pop up on a daily basis.

3. Tokenomics

Dogecoin has an unlimited maximum supply. Whereas an asset like Bitcoin has an inherent value due to its scarcity, Dogecoin is by nature, inflationary. Inflationary assets aren’t excluded from becoming valuable, however, are generally designed to maintain a low price point. This tokenomics decision is actually a countermeasure against the huge price rises of Bitcoin, which prevented it from being a viable mode of exchange. While the value of each DOGE remains low, it can fulfill its role as a way to tip people small amounts.

4. Lack of development

Dogecoin’s original developers, Palmer and Markus, removed themselves from the Dogecoin community years ago. Due to this, and other reasons, Dogecoin hasn’t seen a huge spate of updates in its history – with only 2 code upgrades occurring between 2019 and 2021.

However, since 2023 the developers – headed by the Dogecoin Foundation – have become far more active. These updates aren’t directly related to the Dogecoin cryptocurrency. Rather, they are aimed at helping developers who wish to implement DOGE into their platforms. This could go a long way to helping improve Dogecoin’s long-term utility and function within the ever-evolving industry.

The History Of Dogecoin

Dogecoin is one of the oldest and most-storied cryptocurrencies. The meme coin was developed in late 2013 by Billy Markus and Jackson Palmer, intended as a satirical take on the overly complex coins that dominated the sector (such as Bitcoin and Litecoin). Dogecoin is based on the popular Shiba Inu internet meme that circulated message boards through the early 2010s.

The cryptocurrency was built on a Proof-of-Work consensus mechanism, using Litecoin’s source code and making some minor adjustments. Unlike its alternatives, given its high supply and low value, users with average computers could easily participate in mining the coins. Every successful block mined by participants would net them 10,000 DOGE out of the remaining number of Dogecoins to be mined.

The economic principles of Dogecoin were intended to keep the asset’s price relatively low so it could be used to give “micro-tips” to other internet users on forums and sites like Reddit. This foundation lead to a tight-knit community that’s attracted attention from celebrities like Elon Musk and Snoop Dogg.

Dogecoin’s Rise

For the entirety of Dogecoin’s formative years, its price remained low, although volatile. Aside from a slight jump in 2018, and again in 2020, investors weren’t treated to massive gains like Bitcoin and Ethereum had provided. All of this changed in 2021 when the value of DOGE skyrocketed 14,000+% in just a few months. At its absolute peak, Dogecoin was trading at 73 US cents and looked destined for a date with the fated $1 barrier.

Dogecoin price chart
Dogecoin price chart from 2020.

There were several reasons for Dogecoin’s superb performance during this time:

  • 2021 was by far the crypto industry’s biggest bull run, and many of the top altcoins were seeing monthly gains of 50%+. More and more investors piled onto the coin and speculation almost reached a level of hysteria.
  • Celebrity endorsements were flying in thick and fast. Elon Musk denounced Bitcoin (somewhat) while simultaneously giving Dogecoin the thumbs up. Musk’s tweets were one of the biggest catalysts for price changes, with the price rising at least 20% each time he took to the Twittersphere to pump up DOGE.
  • Snoop Dogg, Gene Simmons, and Soulja Boy tweeted about the coin at some point, resulting in direct price increases.
  • Mark Cuban allowed Dallas Mavericks fans to buy merch from the team’s official store using Dogecoin.

Conclusion

Dogecoin’s value has dropped substantially since its peak in 2021, causing many investors to jump ship and ask the question: Is Dogecoin dead? While the coin’s performance has been less than stellar, declaring one of the most-revered digital currencies “dead” is far too premature. Dogecoin’s status in the industry is almost equivalent to a legend – even if the asset continues to shed value, the coin’s passionate community, developers and legacy will keep it alive for years to come.

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