All I could recall back at the time of writing this article as we were much in the same timeline in 2021 and there was literally raging crypto fire all around. One among the key gainers was Dogecoin that rode high on subreddit/wallstreetBets and who could forget Elon Musk antics. In case, if you are forgetting the same, here’s a tweet to remind you of the same;
Doge’s market exploded post these endorsements and on January 21, 2021, Coin Market Cap, a crypto data firm informed a staggering rise in Doge’s acceptance with a 1421% increase in trading volume and a 60% increase in the prices landing the meme coin to record an unprecedented ATH where it climbed as high as 7.5 cents from 1 cents. However, it wasn’t all fairytale or Utopia all around for the meme coin and the crypto community did witness an unparalleled fall for Doge from a $92 billion market cap in May 2021 to a steep decline of $18 billion in January 2022.
Dogecoin started off to the MOON!
Dogecoin started in 2013 to satirically corner Bitcoin’s rise; but, over the period, the token ended up as a meme ecosystem. It was basically meant to reward whosoever created some good content around Doge; however, in 2021, it did attract Elon Musk’s attention and the rest everyone knows. I hope you recall all the cliches “Doge to Moon”, “People’s crypto” , “SpaceX is going to put a literal dogecoin on the literal moon” and more antics literally acting as a catalyst speeding up Doge’s explosion. However, much of the Doge’s dump was in response to the same person who had literally created all the euphoria around.
Why Did the DogeCoin Witness Such a Sharp Fall?
Yes, you are heading in the right direction! It is Mr. Musk again in the picture. In the month of May 2021, on SNL or Saturday Night Live, Mr. Elon Musk was the chief guest and he had vehemently stressed that PoW or Proof of Work mining could lead to a massive crackdown on the environment. He went on to admit that Tesla, which had earlier accepted payment in Bitcoin, would cease that option citing environmental concerns. As a result, not only Bitcoin but even Doge wasn’t spared from such tantrums and the prices went down to as much as 40%. To further aggravate the situation, Mr. Musk even admitted that Doge is a hustle investment, causing further downslide.
In case, if you are thinking that these were the only reasons that Doge witnessed such a low downside, it wasn’t the case. The list of reasons responsible for Doge’s downfall hasn’t been exhausted yet. There’s one more notable mention to add here. Yes, in case you are wondering about China’s crackdown on all cryptocurrency mining, indeed it was that reason to blame for Doge’s further floor price realization due to PoW mining, much like Bitcoin. Hence, it did justify some crypto experts’ claim that doge’s inflationary nature and consensus mechanism would come to haunt this cryptocurrency. The only difference here was the crackdown and influencer’s tweets simply quickened the process. As evident from the last 3 months chart shown below which highlights that post the ban, Doge has been rigorously sliding downwards.
Did Other Meme Coins Impact Doge’s Dominance?
Shiba Inu could be a potential Doge killer with its ecosystem using ERC standards, which means, it can very well support smart-contracts in the near future. At the same time, Shiba Inu, despite sharing the same use-cases, is a deflationary token, meaning the value of the token would rise with time as token burning occurs from time to time. These aspects helped Shiba Inu to occupy the 8th spot as the top crypto, surpassing Doge, which earned a place at the 10th spot. With time, it is most likely that Shiba Inu may get mainstream adoption more than Doge; nevertheless, at the moment, both the cryptos are having a neck-to-neck competition for one upmanship in the meme coin crypto verse.
Is Doge Worth Investing In 2022?
At the time of writing, Doge is trading at $0.142437; however, the future of Doge hangs much on euphoria rather than a battle-tested use case. Since this crypto lacks utility and other than a payment method, it has no use. However, even if the token wants to establish its reputation as a payment system, it has to remain stable and not show sharp volatility like a 50% to 60% fall overnight. The same has happened in the past and these concerns may obstruct mainstream adoption of doge as a payment network.
However, if users want to earn for doing activities on Reddit, it is indeed a good option to stick to in the near future. However, from an investment perspective, it would be much wiser to look for some other battle tested Altcoins to pick in 2022. Also, do not forget to pick a hardware wallet for storing all your cryptos safely.
