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Dogecoin is a cryptocurrency that began as an entertaining joke but has since gone on to see massive 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 the joke status, the coin grew to an all-time 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 is a look at how the price may develop.
The Current State of Dogecoin
As of May 19, 2022, dogecoin sat at $0.08571. That’s a far cry from its all-time high, with the coin experiencing a sharp drop to less than $0.20 in June 2021. While there have been minor recoveries along the way, the price has continued to drop throughout 2022.
Despite the drop, dogecoin can still be seen as a success story. The coin first breached the one-cent mark only in January 2021, years after its introduction. Anyone who bought at that moment was still up more than 700% on their initial investment as of May 12, 2022. Those who bought then and sold at the top gained more than 7,000%. The coin traded under $0.01 for years, so some could have made even greater profits.
Dogecoin was still the 10th-largest cryptocurrency by market cap, at $11.357 billion, as of May 19. The 24-hour trading volumes are still high, showing that plenty of people are still buying and selling dogecoin today.
Factors That Could Affect Dogecoin Price Predictions 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 the major growth leading up to the all-time high corresponding with his stated support for the coin.
Similarly, a major price drop happened during Musk’s May 2021 appearance on the comedy sketch show “Saturday Night Live.” When Musk made an apparently satiric comment referring to dogecoin as a “hustle,” the price began to drop from $0.65 to as low as $0.416.
Some traders believe that the link between Musk and dogecoin is as strong as ever, as initial reports of his ongoing acquisition of Twitter spurred minor spikes in the coin’s price. This trend continued with a major spike on April 25, 2022, when Twitter accepted Musk’s bid to acquire the company. However, Musk tweeted on May 13 that the deal was on hold, and proceedings have been rocky since. What ultimately happens with Musk’s acquisition of Twitter could yet have an effect on the price of dogecoin.
Dogecoin saw a considerable drop from its Twitter-correlated spikes, losing approximately half its value between April 26 and May 12. This came as cryptocurrencies across the board crashed and lost significant value, though, and may not reflect specifically on dogecoin.
The Dogecoin Use Case
Dogecoin is different from bitcoin and many other cryptocurrencies in a few key ways. For one thing, there isn’t a finite cap on the number of dogecoins that can be produced. Bitcoin does have such a cap, which plays a role in its widespread use as a speculative investment.
Dogecoin is intended to be less of an investment opportunity and more of an actual currency. The coin originally acted 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 lend it stability.
Dogecoin Price Predictions
Cryptocurrency markets are volatile and difficult to predict, with the turbulence of May 2022 being a key example. However, there are some who still have an optimistic outlook for dogecoin and other cryptocurrencies.
One of those optimistic predictions comes from noted cryptocurrency advocate Roger Ver. Ver is well known for his public support for a wide range of cryptocurrencies, including dogecoin. He provided some insight into his dogecoin outlook following Elon Musk’s deal with Twitter.
Ver placed dogecoin among his top three contenders for emerging dominant cryptocurrencies, alongside litecoin and bitcoin cash. He specifically pointed out dogecoin’s advantage in both transaction costs and reliability as the reason he favors the currency.
What If Dogecoin Were To Become a Dominant Cryptocurrency?
Dogecoin is already a major 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, with ethereum following at 18.98%. So how much could dogecoin be worth if it were to become a dominant cryptocurrency?
If dogecoin were to truly become a dominant cryptocurrency and match ethereum’s market cap, it would have a price of around $1.76. If it were to overtake bitcoin, it could have a price of $4.12 or higher.
These prices show potential for growth but are also a sign of where the limit could lie. Can dogecoin ever reach $100? Probably not. Can dogecoin reach $10 this year? Also unlikely. What will dogecoin be worth by 2023? It’s hard to say.
In a world where dogecoin becomes a leading cryptocurrency, investors could see today’s investment increase by 5,000%.
What If Dogecoin Crashes Entirely?
Of course, not all cryptocurrencies are success stories. One recent example highlights just how poorly things can go for once-successful cryptocurrencies. Between May 5 and May 12, issues with the stablecoin terra caused the associated cryptocurrency LUNA to fall from $83 to practically nothing. Its all-time high was $119.18.
This example shows that, with cryptocurrencies, no one can tell just how low the bottom will be. Despite positive dogecoin price predictions from some, there’s always a risk that prices could plummet.
Final Takeaway
Many investors have profited from investing in Dogecoin, but its future — and the future of all cryptocurrencies — remains uncertain. While there could be more gains on the horizon, any investor should evaluate cryptocurrencies very carefully and invest cautiously.
Information is accurate as of May 19, 2022.
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