Originally a joke coin, Dogecoin (DOGE) peaked in the 2021 bull market with a price of roughly $0.73 and a market value of $80 billion. Its worth has, however, drastically plummeted since then. Many investors are wondering whether DOGE, which is currently trading at roughly $0.14, can recover to its former glory given that 2025 may witness the next bull market. Still, there are various reasons this perspective is difficult, most importantly related to its inflationary character, supply dynamics, and market mood.

The Problem With Inflationary Supply of Dogecoin

Dogecoin’s inflationary supply model is one of the main things preventing it from attaining a fresh all-time high (ATH). Unlike Bitcoin with just 21 million coins, Dogecoin has an unlimited supply. The supply of DOGE tokens is always growing since mining generates over 5 billion new tokens yearly. This constant issue will cause inflationary pressure and a devaluation of each existing coin until demand for DOGE rises considerably faster than supply. When Dogecoin reached its ATH market value of $80 billion in 2021, its relative amount in circulation was significantly smaller. The estimated circulation value by 2024 is 146.37 billion DOGE. Should DOGE reach the same $80 billion market cap, its pricing would be about $0.5 even at its ATH price of $0.73. DOGE currently has to attain a far higher market cap than $80 billion in order to reach a new all-time high (ATH) price since the rise in supply has diminished the prospective influence of a bigger market cap on the price of the token. This inflationary character is a major hindrance without a deflationary mechanism (such as burning money).

Potential Growth Engines: Uses, Hype, and Community

Dogecoin’s success comes mostly from its active community and strong social media presence, which create a viral buzz and thereby raise the value of the coin. The community will have to gather once more if DOGE is to reach or exceed its past ATH; this could be spurred by well-known sponsorships from powerful people like Elon Musk. Such endorsements played a crucial role in the 2021 bull run, driving DOGE’s price to the roof. Furthermore, the creation of practical use cases can promote Dogecoin’s expansion. Even though Dogecoin was first only a joke coin with little use, continuous efforts to include DOGE as a payment option across numerous businesses could increase its worth in the real world. For instance, there are current talks on

Go to Source to See Full Article
Author: Adrian Barkley