In an impressive turn of events, Dogecoin (DOGE) skyrocketed by 250% in 2024, leaving behind other heavyweight cryptocurrencies like XRP, Bitcoin, and Ethereum. This surge has captured the attention of many, especially following the November election, which saw Donald Trump clinch the U.S. presidency after promoting a crypto-friendly agenda during his campaign.
The excitement is palpable among cryptocurrency investors anticipating a refreshing regulatory climate, potentially unlocking new avenues and opportunities for value creation across the crypto space. Following Trump’s victory, another delightful twist arrived for Dogecoin enthusiasts, courtesy of Elon Musk. Could this momentum propel the cryptocurrency to reach $1 by 2025?
Musk’s backing has been significant for Dogecoin’s journey. Known for his vocal support in 2021, he created a buzz on social media about Dogecoin and even participated in a Dogecoin-themed skit on Saturday Night Live. While it fueled a remarkable rise—from a mere $0.0046 at the start of 2021 to an astonishing $0.73 in May of the same year—those who bought in later found themselves in a painful decline as the value fell over 90% through mid-2022.
After a quiet phase in 2023 and much of 2024, Dogecoin’s activity surged following the election. Trump’s advocacy for cryptocurrencies, including outrageous ideas like establishing a Bitcoin reserve within the government, spurred a buying frenzy among investors. Musk’s enthusiasm for Trump’s campaign reignited interest in Dogecoin, especially after Trump announced that Musk and billionaire Vivek Ramaswamy would head an initiative cleverly named the “Department of Government Efficiency,” or DOGE, likely referencing Musk’s favored token.
Dogecoin quickly climbed to a 52-week high of $0.47, but here’s the hitch: this recent spike seems reminiscent of past surges, as there’s no solid strategy linking this initiative to actual Dogecoin utility—after all, this DOGE won’t be recognized as an official U.S. department without Congress. This recent rise, still shy of all-time highs, has left some investors feeling wary.
Despite its popularity, Dogecoin’s true operational fundamentals are questionable. Originally created as a lighthearted project in 2013, even its founders are astonished by its price surges. Presently, only 2,315 businesses are reported to accept Dogecoin as payment—many of which are minor or niche services. This indicates that Dogecoin’s price fluctuations predominantly hinge on speculative investor behavior rather than genuine demand.
No cryptocurrency has achieved complete mainstream acceptance yet. Bitcoin, however, keeps reaching new heights, seen as a strong store of value much like gold, which benefits from its capped maximum supply. Unfortunately, Dogecoin does not mirror these attractive traits; it has an unlimited mining period which hinders its potential as a reliable store of value.
So, could Dogecoin hit the fabled $1 mark? While it’s theoretically possible, investors shouldn’t expect such a price point to be sustainable. With its current standing at around $0.38, a leap to $1 would require a 163% increase—an ambitious climb indeed.
If Trump appoints Paul Atkins, a pro-crypto figure, to lead the Securities and Exchange Commission, it could create a more favorable regulatory framework. This shift might spark an optimistic atmosphere for Dogecoin, amplifying the meme token’s appeal, even if solid use cases aren’t invented.
As the seventh-largest cryptocurrency at a market cap of $56 billion, a rise to $1 would inflate Dogecoin’s market cap to $147 billion, remaining a fraction of Bitcoin’s staggering $1.9 trillion. Hence, while a speculative rally could push Dogecoin beyond its current limits, one must approach with caution. History suggests that once the speculative excitement wanes, Dogecoin could plummet again, lacking both substantive fundamentals and enduring demand to sustain long-term value.
