Although it arrived as a meme, Dogecoin (DOGE) is one of the most prominent altcoins in the crypto-currency market. Despite the risks of diversifying one’s portfolio on an altcoin whose only foundation is goodwill, there are reasons to believe in a Dogecoin boom.
Dogecoin is the only altcoin with a first-generation blockchain that has managed to stay in the top 10. Although BitcoinCash (BCH) and Litecoin (LTC) are considered more serious altcoins, they have been sidelined at a time when tokens, non-fungible assets (NFT) and decentralized finance (DeFi) have been growing.
However, the same cannot be said for Dogecoin, which has managed to remain prominent even with the 2022 bear market. Therefore, we will highlight three reasons for you to believe in a possible rise in DOGE.
This is definitely the strongest reason on our list. The billionaire was one of the main people responsible for the rise of Dogecoin in 2021. As an example, on January 28 last year, he posted an image on Twitter of a dog stomping on the cover of Vogue magazine – or “Dogue,” as he wrote.
That one tweet caused a 10-fold increase in Dogecoin within 24 hours. The year passed with more messages about the altcoin meme, leading to a rise and even the emergence of some “Dogecoin killers“.
The Tesla CEO also expressed his appreciation for Dogecoin over Bitcoin. According to the businessman, the altcoin outperforms the primary crypto-currency, as it has a higher transaction volume capacity than BTC.
All this passion for the altcoin meme has led crypto-currency enthusiasts to speculate that DOGE could somehow be used on Twitter. After all, Musk bought the platform in the last quarter of 2022.
If Musk’s suggestive tweets alone have sent altcoin soaring, the crypto’s entry into Twitter could be a big bet for its next boom.
According to blockchain analytics platform Santiment, DOGE is far behind the number of Google searches for the altcoin in May 2021. At that time, dogecoin had reached its all-time high.
Furthermore, the social dominance of the crypto-currency on the aforementioned date was 40%. However, in the last quarter of 2022, it dropped to 14%.
While these numbers may seem bad, they show that crypto-currency could be in an accumulation phase, heading for a bearish reversal, as Santiment notes.
Soon after Ethereum (ETH) migrated to the merge, Dogecoin emerged as the second largest crypto-currency with a proof-of-work (PoW) consensus model. In addition to already having a base of miners, some investors who had mining machines running in favor of ETH have migrated to the altcoin meme.
This brought greater security to DOGE, which over the years has already shown that it has a network that works with transactions that occur without interruption. Of course, this occurs with an emphasis on offering fast transfers and low fees.
Bitcoin has become “digital gold” because of its business model, and Dogecoin may have been the crypto-currency chosen to be the decentralized money of everyday life.
Despite all of these advantages, it’s worth noting that DOGE’s price rise also involves a lot of speculation, even though it is ahead of altcoins like Cardano (ADA) and Polygon (MATIC) in terms of capitalization.
Also, before you believe in the same altcoin that can reach a price of $1, remember that the situation in the crypto-currency market has to change a lot for that to happen. DOGE is designed to perform microtransactions. As such, its inflation model is set up to keep the value low through dilution, with 10,000 crypto units created per minute.