Why Dogecoin (DOGE) Price Is Going Up? (2024)

Just like Bitcoin and Ethereum, Dogecoin (DOGE) is also regarded as one of the leading and popular cryptocurrencies. However, it is different the way it has originated than either of the other digital currencies.

Born as a meme or as a joke, Dogecoin quickly grew its market capitalization in the last few years and won the hearts of several crypto enthusiasts. Infact, Dogecoin is the only meme coin in the entire crypto universe, which surged by more than 15,000% in the year 2021.

If Dogecoin is trending everywhere and has been a favorite of several influential personalities, then what is stopping DOGE from flying to the moon?

Forbes Advisor India has collected the major facts on Dogecoin and its price fluctuations over the years to give you a clear perspective on whether you should consider DOGE in your financial portfolio or remain cautious.

What Is Dogecoin And How Does It Work?

The first of the dog-themed meme coins, Dogecoin was launched on December 06, 2013 by software engineers Billy Markus and Jackson Palmer. Palmer and Markus created “Dogecoin” as a satire on the spread of competitor coins, with an attempt to capitalize on the success of Bitcoin (BTC). The cryptocurrency is named after the popular “Doge” meme featuring a Japanese Shiba Inu breed dog as its logo, which became the coin’s identity.

Dogecoin uses a fork of a cryptocurrency known as Luckycoin, which is now a defunct digital coin. Like any other cryptocurrency, Dogecoin can also be bought, sold or transferred and can be used for purchases. It runs on a proof-of-work network methodology where miners receive payments for validating Dogecoin transactions. Unlike Bitcoin, Dogecoin qualifies as an inflationary coin which means its supply is not limited rather it is indefinite. Currently, there are more than 139 billion Dogecoins in circulation.

Acceptance of Dogecoin

Due to its truncated transaction fees and constant favoritism from Twitter’s CEO and billionaire, Elon Musk, a number of companies have accepted Dogecoin as a payment option.

Here’s a list of some companies that currently accept Dogecoin payments:

• Tesla.
• Twitch.
• AMC Theaters.
• Keys4Coins.
• GameStop.
• airBaltic.
• Dallas Mavericks.
• Sheetz.
• Sling TV.
• Menufy.

Pros And Cons of Making Transactions With Dogecoin

Pros:

• Rising popularity.
• Easy to buy or sell.
• Low transaction fees.
• Strong and growing community.

Cons:

• Not widely accepted like BTC and ETH.
• Too much price volatility.
• No cap on supply.
• No solid fundamentals.

Dogecoin’s Price Flow And Fluctuations

In a very short time, Dogecoin achieved internet meme coin status (especially on Twitter) and thus its prices started going to the moon based on its social popularity and hype rather than any solid fundamentals.

Since its inception in 2013, the price of Dogecoin remained quite flat for seven consecutive years. Then, finally the world’s largest meme coin witnessed a price change in December 2020. After that, it showed major upside in the first half of the 2021 bull run when almost all the tokens have marked their all-time highs. However, much before when again the crypto markets started bleeding red in the later half of 2021, the DOGE price lost its grip over the market, and this downside even continued in the end of 2021 and throughout the year 2022.

Elon Musk, the billionaire CEO of Tesla, has always been the biggest supporter of Dogecoin. Crypto experts believe that anytime in future, Musk’s support could drive Dogecoin to newer heights. This is clearly evident with the recent incident where Elon Musk replaced Twitter’s blue bird logo with its favorite ‘Doge’ meme created a blast in DOGE’s price. Post this major change, Dogecoin rose as much as 37% and also started trending on twitter.

However, only time will tell that this support will trigger a fine recovery in 2023 or in the years to come or will the bearish momentum continue to prevail.

Dogecoin Price Chart (Past 1 month)

Dogecoin to USD Chart Since its Inception

Dogecoin Price Fluctuations Since its Inception

(Source: Coinmarketcap)

Dogecoin Basics

Dogecoin, at the time of writing, is valued at around $0.08 with a total market capitalization of more than $11 billion. According to CoinMarketCap, it is presently ranked at number eight in the entire crypto ecosystem and manages to stay under the top 10 leading cryptocurrencies.

Can Dogecoin be Considered as a Worthy Investment Option?

It is no secret that Dogecoin is one of the most hyped cryptocurrencies, always making headlines in crypto space. Whether, the adorable face of its mascot or the continuous attention from various influential personalities, somehow DOGE has managed to stay amongst the most talked about cryptocurrencies in the world.

Even due to rising popularity, Dogecoin has not been able to create an image of a stable investment option in the eyes of savvy investors.

It should be known that even its founder Palmer and Marker are not associated with DOGE any longer and have abandoned it fully after the few years of its launch. This could be a reason that seasoned investors do not take Dogecoin seriously and do not even consider it as a stable or viable asset.

However, due to its devoted community, DOGE has been considered as an investment and its price has increased over the long-term (see Price Chart mentioned above). Moreover, due to its fast transaction speed and unique market position, there are several investors who consider it as a worthy investment option for a longer term.

However, when it comes to real investment or parking your money in DOGE, there are very lopsided opinions on “Is Dogecoin a good investment?”

According to veteran crypto experts, it totally depends upon the risk and return profile of an investor. They strongly believe that Dogecoin is not widespread and popular like Bitcoin or Ethereum and its utility is also much less than that of solid crypto coins and therefore it is better to stay away from such investment.

One of the biggest drawbacks to Dogecoin is its unlimited supply, which makes DOGE a risky token as compared to Bitcoin which has a limited and definite supply.Moreover, the image of Dogecoin is largely considered as a joke coin or a meme coin, whose prices fluctuate more often than usual and thus no one takes it too seriously.

Such limitations have highly impacted Dogecoin’s adoption in cryptoverse and it remains a risk for the short or medium term horizon. Several investors have also ignored the so-called DOGE rally without giving too much thought to what value Dogecoin could possess in years to come.

Experts believe that an investor might take position and invest only what they can afford to lose and should consider DOGE in their portfolio along with other high potential assets.

Tips to Consider Before Purchasing Dogecoin

Now, till this point we have a fair idea of whether to invest in Dogecoin or not. However, if you wish to make it a part of your financial portfolio, then follow these simple tips to avoid any major losses.

• Invest only what you can afford to lose.
• Purchase when markets are down and sell in bull markets.
• Purchase Dogecoin from reputed and trustworthy cryptocurrency exchanges. For more details on the best cryptocurrency exchange, read our story on: Best Cryptocurrency Exchanges In India.
• Secure your account, including using two-factor authentication.
• Once you buy from an exchange, try to store them in an online or offline wallet. For more details on the best cryptocurrency wallets, read our story on: Best Crypto Wallets in India.
• Do not put all your money in Dogecoin, diversify your portfolio by investing in other financial assets.

India’s Anti Approach on Private Cryptocurrencies

Cryptocurrencies are full of upheavals. Even savvy and hardcore supporters of cryptocurrencies believe that trading in digital coins and virtual assets is an extremely risky affair as they are highly volatile, unpredictable and eccentric in nature. That’s why Bitcoin and other cryptocurrencies have not been accepted as a legal tender and banned in various countries.

Considering the global situation and the collapse of some exchanges including the FTX fiasco, India continues to maintain its much tougher stance on private cryptocurrencies like Bitcoin or Ethereum. Even last year in 2022, The Reserve Bank of India, has clearly expressed its concern on virtual digital assets (VDAs) like Bitcoin and imposed stringent tax implications to curb crypto trading in India.

It is to be noted that digital or virtual assets like cryptocurrencies are still unregulated in India and all these are clubbed as VDAs.

The Indian government has formulated a very tough taxation policy on cryptocurrencies. Effective from 1 April 2022, any income from transfer of VDAs is taxable at the rate of 30% (plus surcharge and cess). Moreover, there is also a tax deducted at source or TDS of 1% which is chargeable on all the VDA related transactions in India.

The RBI Governor Shaktikanta Das has always been a very strong opponent of cryptocurrencies. After the FTX fallout, Das reminded that cryptocurrencies can be a major source for financial crises if they continued to be operated in a free environment.

Das has also stated earlier, “Any change in value of any so-called product is the function of the market, but unlike any other asset, our main concern about crypto is that it doesn’t have any underlying [value]. As a term, cryptocurrency is a fashionable way of describing what is otherwise a 100 percent speculative activity”. He also said that private cryptocurrencies have been created to bypass the system.

Furthermore, in the latest Financial Stability Report (FSB), the RBI has recommended a proper framework, appropriate powers, tools and resources to regulate, crypto assets activities and markets, both domestically and internationally. The report mentioned, “the collapse and bankruptcy of the crypto exchange FTX and subsequent sell-off in the crypto assets market have highlighted the inherent vulnerabilities in the crypto ecosystem.”

Bottom Line

Undoubtedly, Dogecoin carries a significant amount of risk due to its highly unpredictable price fluctuations and too much dependence on social media posts. Though it has been able to maintain its position in the top leading cryptocurrencies of the world, but, still not counted as a worthy investment option for savvy crypto investors.

However, if you have a diversified portfolio and do not care to lose a certain amount of your money, then surely you can try your luck in Dogecoin as no one knows when DOGE “the original meme coin” can fly you to the moon.