Is Dogecoin Dead?

2021 was the year of the dog in crypto markets, which saw an uptick in dog-themed cryptocurrencies.

Is Dogecoin Dead?

2021 was the year of the dog in crypto markets, which saw an uptick in dog-themed cryptocurrencies such as Shiba Inu and Floki Inu, altcoins that rose and fell significantly. While the prices of these cryptocurrencies have struggled to break through, they can all be traced back to Dogecoin. 

Forked from Litecoin, Dogecoin kick-started the meme coin movement in 2013 with Billy Markus and Jackson Palmer. Its symbol, a Japanese breed of dog named Shiba Inu, gave birth to the name DOGE. Since then, meme coins have become a staple in the crypto market. 

After a good run in 2021, most cryptocurrencies struggle through the 2022 crypto winter. Investors have lost money in a bloodbath driving substantial loss in crypto market cap. Dogecoin and other dog-themed cryptocurrencies are no exception. They slumped so badly that their barks have become a mere whimper. 

Dogecoin's loss in value has been attributed to a slowed acceptance of meme coins in the general crypto market. This led to a rapid decline in their value as few saw utility beyond transactional functions. 

Since the start of 2022, Dogecoin has plummeted by over 60%, and it has fallen more than 90% from its all-time high in May 2021. However, within the first 24 hours of Elon Musk's Twitter acquisition last month, the price of the canine coin leaped 94% in weekly gains on speculation that Dogecoin will play a crucial role in Musk’s plan to transform Twitter into X - the everything app - with integrated crypto payments.  

Clouding its future is a $258 billion racketeering lawsuit that accuses the DOGE father of running a pyramid scheme with Dogecoin. He’s accused of driving the price up 36,000% over the last two years.  

Dogecoin: Meme Coin or Dog Whistle?

As the first dog-themed meme coin, Dogecoin launched itself as a satire on the proliferation of altcoins. The founders based its blockchain protocol on the open-source coding of the short-lived Luckycoin cryptocurrency. The Luckycoin cryptocurrency was a spin-off, or a hard fork, of the Litecoin cryptocurrency, which in turn was a hard fork of Bitcoin. 

What started as a joke soon took off among crypto investors and enthusiasts. Its small value made it comfortable for small online transactions. 

The Dogecoin Foundation was established in 2014 to establish a structure for project governance and community development. The foundation was eventually dissolved, but in 2021, it was reestablished when the coin drew new investors and its value increased.  Elon Musk took interest in the meme coin soon after, tweeting that it felt like "the people's crypto." 

The foundation seeks to give the following, according to its website:

  • Support for the Dogecoin cryptocurrency through development and advocacy
  • Dogecoin trademark defense to prevent abuse and fraud
  • A roadmap and governance for the future of Dogecoin

The meme coin's fan base has gradually dwindled over the past few months. Reddit and Twitter have seen fewer people talking bullishly about the coin. While there have been periodic bumps in the price, the trend line on the DOGE chart points down. 

Why Is Dogecoin Trending Down? 

There are many theories. Some have blamed Elon Musk. Others have said that since DOGE didn't offer much beyond safe transactional functions, it was bound to fall. Still others have lost confidence that a meme coin could serve as a long-term asset. 

My take on the reasons Dogecoin is down:

  1. The Crypto Winter: 

The 2022 crypto winter cycle has been brutal to the general crypto market. Every crypto in the market has been affected. 

Dogecoin's value soared from less than $0.01 to about $0.75 at the beginning of 2021. Early investors in the coin made enormous profits. The price may have briefly dropped below $0.18 as a result of these investors' decision to sell their holdings.

Dogecoin's price dropped by nearly 60% between May 2021's highs to November 2021. Some investors guessed that it was a good moment to purchase the token at a discount, while others believed that the price decline marked the start of the token's demise.

On May 12, 2022, as a result of the collapse of the Terra Luna cryptocurrency and the US dollar reaching 20-year highs, the price fell to $0.07. Negative sentiment quickly overtook the market, and many altcoins succumbed to bearish pressure. Prior to Musks’ Twitter acquisition in October 2022, the price sits at $0.06. 

  1. Robinhood selloffs: 

Robinhood was one of the reasons why the price of Dogecoin was able to push higher.  In Q2 2021, Dogecoin accounted for 62% of Robinhood's revenue. However, after Elon Musk's SNL appearance, when he joked that Dogecoin was a "hustle," many investors and traders dumped their DOGE holdings from the platform. The brokerage platform revealed that Dogecoin revenue was already down 8% in late October 2021.

  1. Dogecoin Supply: 

One economic factor that makes money valuable is scarcity—its supply should be limited. While Bitcoin is capped at 21 million coins, the supply of Dogecoin has been growing by about 5 billion coins annually, despite the initial proposal to issue a maximum of 100 billion coins. 

This makes the canine crypto a risky store of value, leading many investors to pull out. 

  1. The battle of meme coins: 

Crypto exchanges offer a wide range of cryptocurrencies. The meme coin class has continued to grow since the creation of Dogecoin. Shiba Inu, Floki Inu, and Saitama Inu are meme coins that have put up stiff competition, with Shiba Inu surpassing Dogecoin in October 2021 and August 2022. 

Bitgert is currently Dogecoin's biggest competitor. Due to Bitgert's robust ecosystem and the use of the BRC20 blockchain—which removes high gas fees—many are liquidating their Dogecoin holdings for Bitgert. 

  1. Galloping inflation: 

The Fed continues to aggressively hike interest rates in order to fight rampant inflation ravaging most economies around the globe. Government policies like high-interest rates tend to discourage investors from investing in high-risk investments. 

Cryptocurrencies and their inherent volatility mean that even the most risk-averse investor has to be careful. As appetite for risk falls, meme coins like Dogecoin are the first to suffer. Investors have been selling off their positions, forcing the DOGE into the red zone. 

Will Dogecoin Survive? 

Factors suggesting Dogecoin will rebound:

First, I expect that as soon as this winter cycle ends, we’ll see positive price movement.

Second, Dogecoin has a strong community backing it. Musk has been one of the most vocal supporters of the canine coin. He often tweets about the coin, causing an uptick in value. He has also opted for Dogecoin as payment for Tesla and SpaceX merchandise and products. Mark Cuban, the billionaire owner of the Dallas Mavericks, also supports Dogecoin. These billionaires have a huge following on social media, which can attract more investors. 

Third, one of the main obstacles to the adoption of cryptocurrencies is scalability. A cryptocurrency won't likely be able to compete with centralized systems unless it can be used by millions of users without running into network problems.

This issue has never arisen on the Dogecoin network. It is widely used, and network outages or poor confirmation speeds are never a problem. Due to its scaling abilities, DOGE is in the lead among cryptocurrencies with a high chance of becoming widely used.

In addition, the price of Dogecoin is very low compared to large-cap coins. With the price below $0.1, it presents an opportunity for crypto tourists and long-term investors to venture in. 

Is Dogecoin Dead? 

Dogecoin has been the winner among the biggest cryptocurrencies in the past month. After news of Musk's $44 billion Twitter acquisition spread, the meme coin has surged to $0.13, a price it hasn't seen since May 2022. According to Coingecko, this represents a 129% increase over the last 30 days. 

Though Musk has yet to drop any hint as to what role the meme coin will play in Twitter's acquisition, his love for Dogecoin has left room for speculation. Dogecoin advocates are keen on the prospects of their token being the go to coin for crypto payments when Twitter integrates crypto payments on their platform. 

However, it's crucial to keep in mind that cryptocurrency markets are still incredibly volatile, making it challenging to anticipate a coin or token's price with any degree of accuracy over the short term and even harder over the long term. As a result, forecasts made by experts and algorithm-based forecasters may turn out to be inaccurate. Here are some of them: 

  • Gov Capital estimates a one-year forecast of $0.18448759863596 for the DOGE token.   
  • WalletInvestor predicts that in a year DOGE may hit $0.151.
  • The average estimate for 2023's Dogecoin price according to DigitalCoinPrice is $0.0771. 

It is impossible to say for certain whether Dogecoin is indeed dead. It is still the most widely used meme coin for transactions. Dogecoin is accepted by a small number of businesses, yet the meme coin may reach new all-time highs in the future. 

About SmartBlocks

Anifowoshe Ibrahim
Content Writer

Here at SmartBlocks, we believe it’s time to democratize currency and make it available to anyone, anywhere, anytime. Therefore, we on