Mastiff (Crypto: Doge) was the original meme of the cryptocurrency industry. It was created as a joke by two friends in 2013, which was inspired by the same “Doge” which spread on the internet like a trail of powder at the time.
Dogecoin has become a ship for speculative investors because it has very little utility in the real world. However, he managed to surpass most major cryptocurrencies in 2024, especially Bitcoin,, EthereumAnd Xrp (Ripple):
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Dogecoin price data by Ycharts
According to the table above, most of these gains came after November 5, that is to say that Donald Trump won the presidential election after campaigning on a series of friendly crypto policies. Dadecoin investors received a special cherry on the top thanks to Elon Musk, which I will discuss later in a moment.
However, the same dived 55% compared to its post-electoral peak. Could this be the opportunity for ultimate purchase or a panel to run for hills? Discover.
Image source: Getty Images.
The Elon Musk effect
Elon Musk has supported Dogecoin since 2019. He often has published memes relating to cryptocurrency on social networks, participates in friendly jokes with other enthusiasts and his company of electric vehicles, Teslaaccepts it as the payment of certain goods.
On May 8, 2021, Musk even participated in a Mastiff-He Saturday Night Live. The token climbed to a record summit of $ 0.73 during the show, how it was sitting on a gain of 15,769% for the year. However, he has also proven to mark the peak – he lost more than 90% of his value in the months that followed.
This should not be surprising given the highly speculative nature of Dogecoin, and the token was mainly sleeping in 2023 and for most of 2024. But the presidential election last November sparked a fire under the cryptocurrencies largely, as Trump promised to make America the cryptographic capital of the world. The United States Commission of securities even started Possess some of its legal affairs against cryptographic companiessuggesting that industry will have more regulatory freedom to invent new use cases to create value for investors.
Shortly after Trump won the elections, he also announced that Musk run an external agency called the Ministry of Effectiveness of the Government, or Doge for short. Its objective is to help administration reduce public spending to balance the budget. He has no role in the cryptography industry, but investors interpreted the name of the agency as a clear reference to the favorite cryptocurrency of Musk, Dogecoin, which has sent the arrow token.
Dogecoin lacks real world utility
The key to creating value for any currency is adoption. Companies must accept it as payment for goods and services, as this gives consumers a reason to buy it and hold it. Unfortunately, only 2,025 companies accept Dogecoin around the world, and many of them are obscure providers of Internet and crypto services, and even gaming websites. It is a drop in the bucket since there are more than 350 million companies recorded in the world.
But Dogecoin is not the only one cryptocurrency Failure of the adoption test. Less than 7,000 companies accept Bitcoin, yet its market capitalization has recently exceeded 2 billions of dollars (although it has since dropped). But Bitcoin has won the investment community Due to its decentralized nature and its supplied supply of 21 million documents, which cannot be modified by a person, a company or a government. Consequently, it is considered a legitimate value store, a bit like a digital version of gold.
Dogecoin, on the other hand, technically has an unlimited supply. Although there is a ceiling on the number of new tokens that can be created each year, the founders have not set an end date – in other words, the Dogecoin supply will literally increase until the end of time. Consequently, it will probably never be considered a good value store like Bitcoin.
Already seen: a rehearsal of the period 2021-2022?
As I noted, Dogecoin decreased by 55% compared to its recent summit in December. Please note, this exceeded $ 0.47, so it was far from exceeding its 2021 summit of $ 0.73. This alone suggests that investors are walking more carefully this time.
As was the case in 2021, there is currently nothing underwear the value of Dogecoin. There is absolutely no indication that the Musk’s government ministry will use the token, and even with a friendly regulatory climate, it is not clear if Dogecoin can find another precious use.
Consequently, I think that recent decreases is only a warning sign for investors. Dogecoin is negotiated at $ 0.21 per token to date, and its low point in 2022 was $ 0.057, which suggests that it could still lose much more value from here.
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Anthony Di Pizio Has no position in the actions mentioned. The Motley Fool has positions and recommends Bitcoin, Ethereum, Tesla and XRP. The Word’s madman has a Disclosure policy.
The opinions and opinions expressed here are the opinions and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.