2024 has been a fantastic year for investors around the world. THE S&P500 And Nasdaq Composite gained 23% and 29% respectively, supported by strong tailwinds in technology, healthcare and energy in particular.
However, another asset class that has held up strongly over the past year is cryptocurrency. BitcoinThe price of rose 120% and reached new all-time highs. And yet, another cryptocurrency is doing even better.
Dogecoin (CRYPTO:DOGE) has skyrocketed 251% in 2024, significantly outperforming the S&P 500, Nasdaq, and even the king of crypto, Bitcoin.
I will explore what influenced the meteoric change in the price of Dogecoin. Additionally, I will explain why January 20 could be an important date for cryptocurrency and assess whether it is the right time for investors to buy.
The chart below illustrates the price performance of Dogecoin over the past year.
As the chart shows, the price of Dogecoin really started to gain momentum around the beginning of November. In fact, since Election Day (November 5), the price of Dogecoin has gained 112% as of January 13.
I don’t find the new enthusiasm around Dogecoin to be a coincidence. During President-elect Donald Trump’s election campaign, he frequently spoke of the need to reevaluate the federal budget and identify areas where spending could be cut. This notion was particularly applauded by two Trump surrogates, Tesla CEO Elon Musk and former Republican presidential candidate Vivek Ramaswamy.
Before the election, Musk frequently took to social media to tease the idea of creating a new federal agency called the Ministry of Government Effectiveness (DOGE). Musk has previously been a supporter of Dogecoin, despite its meme-like nature and lack of real-world utility.
Nonetheless, investors made the connection between the creation of DOGE and Musk’s “backing” of Dogecoin – fueling a cryptocurrency buying frenzy.
Although Dogecoin’s current price has fallen approximately 28% from its previous high of $0.47, the crypto still remains significantly elevated from previous levels. I believe the Dogecoin sell-off was caused by broader sell-offs in stocks and cryptocurrencies in general over the past few weeks.
However, January 20 could be the day Dogecoin starts to rally again.
The reason? Trump’s inauguration will take place on January 20.
Once Trump assumes the post of president of the United States again, Washington will undergo a makeover, highlighted by a Republican-controlled Congress and new cabinet members who will advise Trump in the White House. As such, after Trump’s inauguration, the idea of Musk and Ramaswamy running DOGE is becoming more of a reality.