Although it is very tempting to believe the one-dollar Dogecoin hype, it may be wise to consider why some are predicting prices that high, as well as which factors may make a one dollar price tag on Dogecoin a difficult reality to reach.
Community driven support
As many people know, Dogecoin got its start as a joke. Now, seven years after its initial launch, Dogecoin has grown a considerable community dedicated to pushing the coin forward. That community support has led to a large number of positive results for Dogecoin, including ever-increasing valuation, a new Ethereum-based payment system using a combination of the Ethereum engine and the Dogecoin code, and a steady rise in investor interest, to name but a few.
The community behind Dogecoin is also largely responsible for its steady growth in popularity, as well as its adoption rates among online retailers and merchants. One example of a famous personality whose name has helped the coin move forward is Elon Musk who, last year, was named CEO of Dogecoin as a lighthearted joke.
Elon Musk took the April fool’s joke very well and gave the coin even more exposure by sharing his positive feelings about the cryptocurrency project on his twitter account. Almost immediately after tweeting his support for Dogecoin, the value of the coin rose sharply with many expecting Dogecoin to go to the moon. Unfortunately for Dogecoin, the spike in coin price was short-lived. However, interest in the coin was not. The dedicated following that Dogecoin enjoys has certainly kept the project on a steady path to success.
Even today, Elon Musk has his “former CEO Dogecoin” tagline on his twitter account which is an indicator in itself that Dogecoin is more than just a cryptocurrency. It is also the currency of a very particular group of people.
Besides Elon Musk, other famous personalities have backed Dogecoin as well. John McAfee, for example, has been very public in his support for Dogecoin stating that the coin has a very positive outlook moving forward. John McAfee, of course, is a popular name within the crypto world as he has made many price predictions for the cryptocurrencies that seem to ring true more often than not.
Why a one-dollar price tag is not likely
Dogecoin is surely going to head into some pretty good places in the future. With plenty of community support, a new blockchain payment system which not only enables easier, faster, and safer payments between merchants online, but also bridges the gap between Ethereum and Bitcoin-based blockchains, and a steady rise in investor interest, it is clear that the price will almost certainly go up both in the short term and the long. That said, one dollar is quite a jump from where the price currently sits.
Lack of development
Unlike many other crypto currencies, Dogecoin does not have a development team working on the product full-time. Instead, there are a large group of part-time contributors who seem to come and go as they please. That is one of the primary reasons that Dogecoin hasn’t received any major updates in almost 5 years. With the lack of development, it is hard to imagine Dogecoin being developed into anything that it isn’t already capable of.
Another issue facing drastic valuation for the coin is the fact that there is no max coin limit set. Most other crypto currencies on the market have a certain amount of coins that can and will be produced which is a feature that guards them from inflation and drives up the prices. Since Dogecoin does not have any limit as to how many coins can be created, inflation is highly likely which means prices will never get as high as they could otherwise.
Dogecoin’s reputation is fantastic for the community that supports it but it doesn’t do a lot for serious investors looking for financial tools to conduct business with. There are many crypto currencies on the market that are specifically designed to do the same tasks Dogecoin sets out to accomplish with the primary difference being that those other coins have a lot of failsafes built-in that Dogecoin does not.
As Dogecoin is largely regarded as a joke coin within the cryptocurrency marketplace, it would take a good deal of positioning within the market to become a true competitor to other cryptocurrencies like XRP and XLM just name a couple.
XRP (Ripple) and XLM (Stellar) are just two of many examples of cryptocurrency projects that can handle the type of online trade facilitation that Dogecoin sets out to do. In fact, there are many projects that do the job very well and provide a good deal of competition that Dogecoin may not be able to overcome. As Dogecoin is already one of the top performing cryptocurrency is on the market, the coins and tokens it would need to surpass are each incredibly strong in their own right.
As much as Dogecoin enthusiasts would like to see prices reach one dollar per coin, the current outlook does not appear to show that reality. There are just too many factors working against that kind of valuation in either the short or long-term. The coin is already inflated and will continue to be so until a change to the code implemented. That alone makes it very difficult for prices to make such a dramatic jump in any amount of time. That is not to say that it won’t happen, but it would certainly be surprising if it did. Dogecoin does have several positive features pushing it forward and it is likely that it will remain a solid choice for many for years to come. For that reason Dogecoin prices seem to be looking at continual growth over the long-term making it an interesting investment option for anyone looking to hold onto a stack of Dogecoin’s for a considerable amount of time.