An important altcoin bought by the Turks is Dogecoin. But despite the rise in stocks and other cryptocurrencies, it is trading in the red this year. So, is it time to sell for Dogecoin? Let’s take a look at our article.
Being selective for altcoin
The cryptocurrency world looks very different today than it did in 2021 at the height of the frenzy among investors. At that time, the vast majority of mainstream tokens had made strong gains. Today, however, investors are much more selective. For example, Bitcoin and Ethereum are trading in the green with gains of more than 50% in 2023. On the other hand, the speculative token altcoin Dogecoin is in the red and is down about 3%. Dogecoin is still a favorite of some crypto enthusiasts, including Elon Musk. However, even that could not prevent the token from falling more than 90% from its all-time high. So is it finally time to give up the token forever?
Dogecoin isn’t the only cryptocurrency to have this problem. Almost none of them have created a clear, mainstream use case that could drive mass adoption by consumers and businesses. Without it, it becomes very difficult to sustain value. Because the only people who want to hold their tokens are those who believe that someone will come along later and pay a higher price. In other words, speculators. For example, only 2,163 businesses worldwide accept Dogecoin as payment for goods and services. It is estimated that there are 334 million registered businesses worldwide. Altcoin Dogecoin’s status so far is just like a drop in the bucket.
Cryptocurrency sentiment could hinder Dogecoin’s resurgence
However, a high-profile company is Tesla. The company says it will start accepting Dogecoin as payment for items (such as clothing) in its online store in early 2022. Musk has also sought to bolster the token by accepting it for new products like the Burnt Hair fragrance it launched under the Boring Company last year. He has also been a vocal advocate of Dogecoin, regularly supporting it on the Twitter social media platform and even on an episode of Saturday Night Live in 2021 with bullish comments pointing to Dogecoin’s peak price of $0.74 per token. Currently, the token is trading at around $0.06. It fell 91% from the peak.
So far, nothing Musk has done has been enough to stop altcoin Dogecoin’s decline. This is likely because larger forces play a role, namely worsening sentiment towards cryptocurrencies among investors. There have been a series of spectacular crashes on some of the industry’s most popular projects and exchanges. It was then seen to reach new lows in 2022. The TerraUSD stablecoin lost $60 billion overnight. It was also wiped off the face of the earth. Then top crypto exchange FTX was caught mixing client funds with its own funds. Regulators went after nearly $3 billion in lost client funds. In both cases, investors faced a complete and utter loss with almost no recourse.
Binance is now facing charges
Now, Binance, the world’s largest crypto exchange, is being sued by the US Securities and Exchange Commission (SEC) for operating a “scam network” for allegedly committing similar crimes. This is part of a broader push by the SEC to make the cryptocurrency industry comply with the same rules and regulations that apply to other financial securities that exist to protect investors. It’s no surprise that confidence in the crypto space is at an all-time low. The problem with altcoin Dogecoin is: speculative tokens with no real use case. These tokens will be among the last to survive this challenging period for the industry.
Dogecoin has dropped nearly 91% from its peak price set in May 2021. But it certainly remains a popular cryptocurrency among speculators. Even famous billionaire businessmen like Tesla CEO Elon Musk and Dallas Mavericks owner Mark Cuban have openly shown their support for the meme coin, which was launched into the spotlight in early 2021. With a current market cap of $9.5 billion, DOGE is the eighth most valuable cryptocurrency in the world. But some investors may have their eyes set on an even higher value. Let’s base it on the current price of $0.068 per token. A hypothetical price target of $1 translates to a massive gain of almost 15x. So is this possible?
Will Altcoin Dogecoin be $1?
The year 2021 has been a boon for the cryptocurrency market, which has seen its entire value nearly triple. But last year was a different story. Rapidly rising interest rates have forced investors to stay away from risky assets. This caused the market to lose about two-thirds of its value in 2022. There have also been major failures by high-profile crypto firms. It also made things much worse last year. We currently see ourselves in what we call a crypto winter. This is a period in which the interest in digital assets has been under pressure for a long time. This situation is exacerbated by the recent legal action taken by the Securities and Exchange Commission against Binance and Coinbase for allegedly operating unregistered brokerage and exchange businesses. Accordingly, the events increase the concerns of crypto investors.
However, blockchain technology still shows promise. The largest programmable crypto network, Ethereum, is enabled by the use of smart contracts, which are computer programs that are automatically executed when separate parties satisfy the parties to a particular transaction. It has paved the way for a variety of use cases, from immutable tokens and gaming apps to decentralized finance protocols. Many crypto proponents emphasize that these decentralized applications will become even more common in the future. He also thinks that it will upset many sectors.
Betting on the community
Dogecoin is among the most valuable cryptocurrencies. He found a way to break the top 10 list. To be fair, it could be argued that cryptocurrencies have so far only acted on how popular they can be among a community of users, developers, or investors. Dogecoin therefore remains valid. However, it is not correct to base an entire investment thesis on the popularity of a digital token. It’s also not a wise way to allocate one’s hard-earned savings without a fundamental underlying reason.
cryptocoin.com Let’s assume that altcoin Dogecoin could one day reach its target of $1. With 140 billion tokens outstanding, this equates to a potential market capitalization of $140 billion. This figure is more than big companies like Starbucks, PayPal and Target. Unless there’s an unexpected benefit increase, it’s hard to think that Dogecoin deserves this kind of valuation. So I don’t think it will ever reach $1.
