This year has been exceptional for digital-asset investors. The entire cryptocurrency market has surged more than 40% in value since the beginning of 2024 (as of July 23). This remarkable gain not only overshadows the 2022 crypto winter but also outperforms the Nasdaq Composite index.
As the bull run continues, investors might be considering speculative tokens. Dogecoin (CRYPTO: DOGE), which has risen 53% this year, may be on your radar as a potential investment.
Should you invest $100 in Dogecoin now and hold through 2024 and beyond? Here’s some key information to help you decide.
Dogecoin’s Legacy
Launched in 2013, Dogecoin is one of the oldest cryptocurrencies. Despite its highly volatile history, it is currently the eighth-most-valuable crypto globally, with a market cap of $19 billion. This longevity keeps it in the limelight.
It’s surprising to think that Dogecoin, initially created as a joke by its founders, has become so valuable. The original aim was to offer a fun alternative to Bitcoin. Dogecoin operates on its own blockchain and uses a proof-of-work consensus mechanism.
In contrast, Shiba Inu, a recent competitor in the meme-coin space, is built on the Ethereum network, allowing it to interact with various decentralized applications (dApps), which might make it more appealing to users.
Limited Real-World Utility
In my view, a cryptocurrency’s long-term potential is often tied to its real-world utility. Bitcoin seeks to serve as a new monetary system, potentially replacing fiat currencies or gold, while Ethereum aims to be the world’s decentralized computer, with smart contracts supporting dApps for broader usage.
Dogecoin, however, lags in this regard. According to cryptwerk.com, only 2,500 merchants accept Dogecoin as a payment method, which is relatively modest.
While Dogecoin can be used for transactions, it is primarily seen as a speculative asset. Its design is a drawback: Unlike Bitcoin’s capped supply of 21 million coins, around 10,000 new Dogecoin tokens are minted every minute, with no maximum supply. This unlimited supply makes significant price increases challenging unless demand increases dramatically.
