Well, this is crypto and anything is possible. Just over a year ago, no one would have believed that Dogecoin (DOGE) could rally by over 12,000% in a span of months.
However, besides the theoretical possibility of it, realistically speaking, Dogecoin to reach $20 is a little bit on the higher side. It can happen, but maybe in more than a decade. To understand why $20 is a little bit of a theoretical more than a practical possibility, it is important to look at the market cap.
If Dogecoin were to trade at $20 a coin, it would have a market cap of about $2 trillion. This would be even higher when the annual inflation of 5 billion Dogecoins is factored into the equation.
That’s a market capitalization that is double that of Bitcoin at current prices. For Dogecoin to hit such valuations, a sizeable portion of all payments that happen globally would have to be going through it.
This is impossible because it is angling for the same market that a lot of other cryptocurrencies are going for. There are hundreds of altcoins out there that can be used to send money fast, and cheaply.
As such, even if the world were to suddenly go full crypto, it would be unlikely for Dogecoin to take up more than 50% of the total payments market. This pretty much dents the possibility of Dogecoin hitting $20 a coin in the foreseeable future.
Check out: Where Will Dogecoin Be In 5 Years?
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Then there is the fact that Dogecoin is inflationary. This means Dogecoin works more like fiat currency than an asset. The 5 billion new coins that enter circulation every year will always have an impact on its demand and supply dynamics going into the future.
At that rate of inflation, such high valuations would easily mean that at some point, Dogecoin would have a market capitalization that is higher than the world’s largest economies.
That said, cryptocurrencies evolve all the time, and there are moves that Dogecoin can make, and easily trade at $20 a coin. One of them would be to change how it operates, and become deflationary. If it were to put a cap on the supply then introduce a coin burn, Dogecoin could trade at $20 a coin. There are cryptos that have done this and experienced a drastic increase in their prices in a very short time.
However, Dogecoin does not have such plans in its roadmap, so it is just conjecture at this point. The most realistic price prediction for Dogecoin at this point is around $1. There are multiple factors that point to the possibility of Dogecoin hitting a dollar in 2021/22.
The first one is the broader market momentum. The crypto market just crossed the $2 trillion mark and it’s gaining. If this momentum sustains for the remaining part of 2021, then Dogecoin hitting $1 this year is possible.
Going into 2022, the Doge-1 mission could play a role in its value appreciation. The hype that this space mission that is fully funded in Dogecoin will generate could easily push this crypto to $2 or more.
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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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