Can Dogecoin ever reach heights of bitcoin and Ethereum? ‘Parody of real cryptocurrencies’
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Dogecoin came to fruition in 2013, and it is based on the popular meme of a Shiba Inu dog named ‘Doge’. But the cryptocurrency has surged on occasion over the last year and has even gained the attention of billionaire Tesla CEO Elon Musk.
Fans of the cryptocurrency frequently make their views heard on social media, where calls to get Dogecoin “to the moon” are commonplace.
Michael Kamerman, CEO of Skilling, told Express.co.uk about the reasons why Dogecoin has taken off this year.
Mr Kamerman said: “Dogecoin has set itself apart from other cryptocurrencies only because it is inflationary, meaning there are no limits to the numbers of coins in circulation.
“This in turn, is intended to maintain the incentive to mine, by removing the cap on coins.
“However, the main driver behind Dogecoin’s popularity is its online communities, coupled with support from high-profile business magnates like Elon Musk.
“The resurgence in attention to Dogecoin, which was originally launched as a parody currency, may seem attractive to investors due to its volatility, but for the currency to ever have intrinsic value, scalability and security issues need to be addressed.”
Dogecoin has had an interesting year, characterised by incredible highs and plummeting lows.
According to CoinDesk data, Dogecoin reached its peak over the last year in May 2021 with a price of $0.722320.
However, as of September 3, Dogecoin’s value is significantly lower than its peak in May, standing at $0.299560.
Experts are not sure Dogecoin can reach the heights of leading cryptocurrencies like bitcoin and Ethereum.
David Weliver, founder of Money Under 30, told Express.co.uk: “Everyone loves to speculate on Dogecoin, but it’s important to remember that Dogecoin is a parody of real cryptocurrencies.
“Unlike bitcoin, Dogecoin has no hard cap. Unlimited Dogecoins can be created.
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“This makes it nearly impossible for Dogecoin to have any intrinsic value, so its price will always be based upon the ‘greater fool’ theory – it is whatever someone is willing to pay.
“After a lull in interest, Dogecoin is having a bit of a resurgence right now because of lifts in the overall crypto market and, possibly, people looking for a pleasant distraction as summer holidays come to an end.
“If I had to guess, Dogecoin might temporarily reach a new high by the end of 2021.
“By 2025, I would not be surprised in the least if Dogecoin becomes worthless.”
Gavin Smith, CEO of cryptocurrency consortium Panxora, told Express.co.uk: “As for Dogecoin, it’s had a hard time since the hype earlier in the year, still down over 50 percent.
“While there are enthusiasts for this token, it should be considered at the highly speculative end of what is already a volatile asset class, so only invest in doge what you can afford to lose.”
Anyone considering investing in any cryptocurrencies should be aware of the risks involved.
Crypto markets are notoriously volatile and are known to be very unpredictable, and the information in this article does not equate to financial advice.
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