Dogecoin: From Internet Joke to 1 USD Dream – Should You Invest Right Now?

Dogecoin (CRYPTO: DOGE), created in 2013 as a joke inspired by Bitcoin, has become one of the most prominent cryptocurrencies in the market. Named after the famous "Doge" meme featuring a Shiba Inu dog, Dogecoin was initially not taken seriously by anyone. However, over the past decade, it has surprised investors with its explosive bullish runs. From 0.00026 USD to 0.7376 USD – The Incredible Growth Story When it started trading, Dogecoin was priced at only about 0.00026 USD. However, by May 8, 2021, it had reached an all-time high of 0.7376 USD – equivalent to a growth of over 283,000%. If you invested 100 USD at the beginning, that asset once peaked at nearly 283,692 USD before dropping to about 61,538 USD today at a price of 0.16 USD. Nevertheless, a profit of 61,400% is still an impressive figure. How Does Dogecoin Work? Dogecoin is built on the open-source code of Litecoin, which is a fork of the Bitcoin blockchain in 2011. Like Bitcoin and Litecoin, Dogecoin uses the "Proof of Work" consensus mechanism, meaning users need to use computational power to mine. However, Dogecoin is different due to its use of the Scrypt algorithm - allowing for faster transaction processing and less energy consumption compared to Bitcoin. Additionally, Dogecoin has the ability to (merge-mining) with Litecoin. This means that miners can mine both cryptocurrencies simultaneously with the same computational work. Unlike Bitcoin – which has a supply limit of 21 million coins, Dogecoin is an inflationary currency with an unlimited supply. As of now, there are approximately 150 billion DOGE in circulation, and each year, an additional 5 billion DOGE is added. This makes Dogecoin impossible to value based on scarcity factors like Bitcoin. In addition, Dogecoin does not directly support smart contracts (, an important feature for building decentralized applications ), NFTs, or DeFi platforms on many other blockchains like Ethereum or Solana. While it can connect via sidechains, its practical usability for developers remains very limited. The Drivers That Could Push Dogecoin Above 1 USD Despite having many limitations, Dogecoin still has the potential to create a new bullish wave due to several factors: Support from Elon Musk: Elon Musk is the most famous supporter of Dogecoin. He has tweeted about DOGE multiple times, causing the price to spike. He has also allowed payments for some Tesla products using Dogecoin. Recently, Musk's establishment of the "Department of Government Efficiency" ( abbreviated as DOGE) under the Trump administration has drawn even more attention, although he has since left this agency. Greater acceptance: If more and more businesses accept Dogecoin as a means of payment, its value could stabilize and increase. ETF for Dogecoin?: Financial institutions like Grayscale, Bitwise, and 21Shares have filed to launch ETF products related to Dogecoin, similar to the approved Bitcoin and Ethereum ETFs. If approved, institutional capital could flow into Dogecoin. Accumulation by "whales": Some large wallet addresses are buying Dogecoin in large volumes, which could lead to a price spike if supply tightens. Favorable macro context: Lower interest rates, relaxed financial regulations, and the overall recovery of the crypto market could also create conditions for DOGE to break out. Should You Buy Dogecoin At The Current Price? Although Dogecoin is trading below the 0.20 USD mark, and many people hope for the prospect of 1 USD, this is still very far off. For DOGE to reach 1 USD, the price would need to increase by more than 525%, equivalent to a market capitalization increase from the current 24 billion USD to 150 billion USD – nearly half of Ethereum's current market cap. However, Ethereum has many stronger supporting factors: a huge dApp ecosystem, smart contracts, DeFi, NFTs... While Dogecoin does not have those foundational utilities. With its inflationary nature, lack of practical application in development, and significant dependence on market sentiment as well as individual Elon Musk, Dogecoin may still only be suitable for risk-loving investors who enjoy "surfing" the news. Conclusion Dogecoin is a symbol of a "crazy" era in the cryptocurrency market – where things that seem like a joke can still generate millions of USD in profit. But currently, the actual value and applicability remain big questions for DOGE. If you are a risk-loving investor, understand the risks, and accept high volatility, Dogecoin may be a small part of your investment portfolio. However, if you are looking for a stable asset with long-term potential based on technology and practical applications, you might want to consider other options such as Ethereum, Solana, or more advanced Web3 platforms.