Can Dogecoin Hit $1? Yes, But Only If It Happens

Dogecoin (CRYPTO: DOGE) may be one of the oldest cryptocurrencies in the world, but it is undoubtedly one of the most volatile in the world.

Dogecoin (CRYPTO: DOGE) is one of the oldest cryptocurrencies out there, but it is also undeniably one of the most volatile. In 2024 alone, it has taken its owners on a rollercoaster ride.

At the time of writing, this meme cryptocurrency is trading for around $0.10, about 86% below its all-time high of $0.74 per coin set in May 2021. But can Dogecoin ever reach $1? It’s possible, but only if a lot of things happen.

Increasing the utility

The first—and obvious—thing that could drive Dogecoin’s price up is if the coin’s usability gets a boost. Right now, DOGE can be used to tip users on Reddit and help users who are on the platform. Bulls are hoping the same can happen for social media platform X, as its owner, Elon Musk, has expressed his opinions on the crypto in the past. In total, Dogecoin can be used as a payment method at 2,594 different merchants. That’s nothing to write home about.

The fact that Dogecoin has its own block chain network, as opposed to being compatible with Ethereum in the way Shiba Inu is, means that it has limitations in terms of its ecosystem of decentralized applicationsAnd the fact that there are only 21 full-time developers working on it, compared to the nearly 2,800 for Ethereum, doesn’t bode well.

But if Dogecoin can somehow increase its usability, the demand for its native coin will increase. This is a key ingredient for the price to rise.

However, in its 11-year history, Dogecoin has fallen seriously short in this regard. Its price movements are driven more by various hype cycles than anything fundamental.

Reduction of supply

Another catalyst that could propel Dogecoin’s price to new heights has to do with its structure. This is an important aspect that investors should be aware of in any cryptocurrency project.

Bitcoin is getting a lot of attention because it has a fixed supply limit. It has a predetermined growth rate that enforces the long-term limit of 21 million coins (around 19.7 million are currently in circulation). This element of scarcity is extremely valuable to some investors, which likely helps explain why the world’s top crypto has a market cap of around $1.2 trillion.

Here’s where Dogecoin falls seriously short. There are now nearly 146 billion coins in circulation. That’s a whopping sum. But to make matters worse, 10,000 coins are added to the supply every minute. This means that in an entire year, the supply increases by over 5 billion coins.

This unfavorable position makes it extremely difficult for the price to rise. Demand, already dampened by a lack of utility, must outpace a constantly growing supply. This is not an ideal situation for investors.

The story continues

If the developers of Dogecoin were to implement a coin burning scheme which aggressively reduced supply, it would be a step in the right direction. But there are no plans to do so.

Be realistic

Since the beginning of 2023, the cryptocurrency market has increased in value by around 170%. During the same period, the price of Dogecoin has increased by around 50%. This is a worrying development, as it shows that even one of the most speculative tokens cannot benefit as much as one might think during the industry’s bull run. It has severely underperformed the broader digital asset market.

While there seems to be a path to $1, namely by increasing utility and drastically reducing supply, I don’t have much confidence that this outcome is likely. As a result, Dogecoin remains a very risky bet. Investors have promising cryptocurrencies to consider buying.

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