Dogecoin (CRYPTO: DOGE) He has taken his guards on a wild ride. Although its price is up an impressive 40,600% over the past decade (as of March 3), it is currently trading at 88% from its high. This level of volatility is nothing new.
Now that Dogecoin has declined, there may be risk-seeking market participants willing to move. I am not one of those people. Here are three reasons why I don’t buy this meme cryptocurrency.
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The first reason I stay away from Dogecoin is that it doesn’t solve the problem. Digital signage was actually created as a joke competition Bitcoin. that’s it. There was no other purpose. And its two founders are no longer involved.
Over the years, it’s clear that the market has looked more favorably on Bitcoin, given that its $1.4 trillion market cap is worth 92 times more than Dogecoin’s $15.2 billion. The former has brand recognition, network effect, regulatory buying, and increasing integration into financial services that support its use case as a new monetary asset.
Dogecoin, on the other hand, falls short in these key areas. This does not bode well for her future.
Despite this, it is still impressive that Dogecoin has remained relevant for so long. Currently its market cap is higher than famous customer facing companies viz Roku, Dutch brotherand Etsy. This is a staggering statistic.
I believe it all comes down to the community of Dogecoin supporters. They continue to believe in the project for some reason. For what it’s worth, though, it appears that the community’s strength is weakening, as Dogecoin’s price has shown no signs of a sustained return to its record high in May 2021.
In the short term, the price can benefit from various hype cycles, which come from the public mention of Dogecoin or market speculation about its adoption. These sports do not last long, and they are impossible to time correctly.
There are currently 169 billion Dogecoin tokens in circulation. This number increases by 10,000 per minute and about 5 billion per year. There is no hard supply cap. So, investors completely miss that scarcity is a valuable feature.
