Why We Think Dogecoin Could Be The Next Big Thing
Dogecoin (DOGE) is a penny cryptocurrency that has performed extremely well since 2020. From March 2020 to April 2021, Dogecoin recorded gains of over 12000%.
However, like the rest of the market, it went into a correction in May and tested lows of $0.17 from a high of $0.77 in April. But it is making a recovery, and like most cryptos, is yet to retest all-time highs. As such, Dogecoin would be considered undervalued at current prices.
While there are all kinds of wild projections about Dogecoin out there, there is reason to believe that Dogecoin will be huge going into the future. Huge in this case meaning it could trade at multiple times its current prices, and also be widely used for everyday payments.
Adoption Is Gaining Momentum
Dogecoin started off a joke, and for the better part of the last decade, was largely considered so. However, things are changing, and today, Dogecoin is easily one of the most adopted cryptocurrencies out there.
Right now, more than 20 globally recognizable companies accept Dogecoin. They include the Dallas Mavericks, the basketball team owned by Mark Cuban.
Going forward, Dogecoin adoption will only accelerate. To understand why one needs to look at the reason why it has gained in adoption so fast, to begin with.
Dogecoin’s adoption so far has been the result of the hype that it built up from mid-2020. It is in 2020 that Elon Musk started hyping up Dogecoin, and the price started to rally. Lots of companies looking to capitalize on this for marketing then started accepting Dogecoin for payments.
This correlation between hype and adoption is a positive indicator for Dogecoin’s adoption in the near term. That’s because something much bigger than Elon Musk’s tweets is coming in early 2022.
In Q1, SpaceX, and Geometric Energy Corporation will be conducting a lunar mission that is a little different from any other in the past. This mission is fully funded in Dogecoin and is named after Dogecoin.
According to those behind the mission, the goal of this mission is to show the applicability of cryptocurrencies in interplanetary commerce. While that’s huge, the implications it will have to the Dogecoin network will be even bigger.
It will be bigger in the sense of the hype it will create for Dogecoin. For crypto that has gained by thousands of percentages on the power of tweets alone, being televised and live-streamed globally in a space mission will take it to even greater heights.
As the hype builds around it, a lot of companies will likely announce the adoption of Dogecoin as a payment method. This will in turn drive up the intrinsic value of the Dogecoin network, over and above the hype-driven valuations that will come with this event.
Since adoption is the key to long-term value growth, this event could easily see Dogecoin trade, and sustain at a price level above $1 for many years to come.
Dogecoin’s Technical Capabilities Are Set To Get Better
Due to the fact that Dogecoin was originally made to be a joke coin, the developer team pretty much abandoned it along the way.
However, after Elon Musk came into the picture and contributed to this crypto’s huge price rally, the team returned.
They even proposed a number of upgrades to the protocol aimed at making Dogecoin transactions cheaper, and faster. Once these upgrades are made, Dogecoin’s competitive advantage as a payments cryptocurrency will grow exponentially.
That’s because for payment cryptos to have any value, they must be cheaper and more efficient than traditional forms of payments. Otherwise, there would be no point in using them in the first place.
Besides becoming more competitive, Dogecoin has the advantage of being one of the most visible cryptocurrencies in the market today. There are many other cryptocurrencies out there that are very good for payments. However, they are not known and hence may not gain traction as fast as Dogecoin.
This places Doge in a unique position for adoption going into the future. Like all markets, there is a likelihood of crypto adoption consolidating around a small group of cryptos, and Dogecoin has the potential to be one of them.
Such potential makes it high potential crypto to watch in the long run.
Read Also: Is Dogecoin A Good Investment Opportunity?
Dogecoin’s Inflationary Nature Works In Its Favour
Up to this point, there is no cryptocurrency that has been adopted enough to compete with fiat for everyday payments. When it first started, Bitcoin was supposed to be a peer-to-peer currency that could be used for everyday payments. However, it veered off this goal a long time ago and has now positioned itself as a store-of-value cryptocurrency.
The reason why it is impossible for most cryptocurrencies to work as everyday currency is that they are deflationary. As such, investors holding them to expect value appreciation, hence eliminating the incentive to spend.
No one wants to spend their crypto, and end up like the guy who spent 10,000 BTC to buy Pizza.
Dogecoin does not have this problem because it is inflationary. Every year, 5 billion Dogecoins enter circulation, and this eliminates the incentive for everyone to HODL it.
This makes it one of the most ideal cryptocurrencies to use for payments. Even billionaire Mark Cuban made a note about this aspect to Dogecoin, indicating that it is one of the strongest cryptos out there for payments.
However, just because it is inflationary does not mean that Dogecoin is pointless as an investment. As long as the underlying demand for it keeps going up, its value will go up. The only difference is that its growth is likely to be more linear, and less volatile than deflationary cryptocurrencies.
In the long run, this is good because predictable growth could lead to an increase in institutional buyers taking up Dogecoin as an investment. In essence, even for someone looking to invest in Dogecoin long-term, it still makes a lot of sense.
Essentially, it is one of the top cryptos to watch going into the future.
eToro – Best Exchange to Buy Dogecoin
eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.