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▲ Dogecoin (DOGE), Bear Market/AI Generated Image ©
Dogecoin (DOGE), which once surpassed a market capitalization of $90 billion, has plummeted 88% from its peak. With no continuous demand sources found and supply constantly increasing, an analysis suggests that the possibility of breaking $1 by 2027 is slim.
According to investment specialized media The Motley Fool on September 12 (local time), Dogecoin was created as a joke in 2013 by Billy Markus and Jackson Palmer, inspired by the internet meme 'Doge'. However, speculative buying surged, causing its price to soar to $0.73 in 2021, and its market capitalization at the time exceeded $90 billion, making it more valuable than most companies in the S&P 500. Since then, the price has fallen by 88% from its peak, dropping to $0.068 last month, its lowest in three years.
The problem is the lack of clear, continuous use cases to replace speculative demand. XRP (Ripple) is used for international remittances through Ripple Payments, and Ethereum (ETH) and Solana (SOL) are used to pay gas fees for running decentralized applications. Bitcoin (BTC) also has consistent demand from investors who recognize it as a store of value. Dogecoin, on the other hand, can be used for payments, but according to the cryptocurrency directory Cryptwerk, only 2,328 businesses worldwide accept it. The media evaluates that it has shown limitations as a store of value because it is not connected to decentralized application platforms and has not set a new high for five years.
The unlimited supply structure has also been identified as a factor hindering price increases. Dogecoin uses a mining method similar to Bitcoin, but unlike Bitcoin, which has a maximum supply limited to 21 million units, Dogecoin has no cap on its total issuance. Although the annual mining volume is limited to a maximum of 5 billion units, there is no end date for issuance, meaning the circulating supply continues to increase.
At the time of writing, Dogecoin's circulating supply is approximately 155.9 billion units. If an additional 5 billion units are added over the next 12 months, the existing supply will be diluted by about 3%. The Motley Fool analyzed that, assuming the ecosystem does not generate new real value, the price would need to drop from $0.085 to approximately $0.082 to maintain the current market capitalization of $13 billion. Accordingly, it views price increases themselves as difficult until 2027, and the possibility of a surge to $1 as even lower.
The analysis also suggests a significant long-term supply burden. If the current structure continues, Dogecoin's circulating supply could double to approximately 311 billion units over the next 31 years, and if other conditions remain equal, the price could fall by more than 50%. The media stated that for Dogecoin to avoid this trend, it must secure continuous sources of demand, but it has failed to do so in the 13 years since its launch, thus presenting a negative outlook for its potential to reach $1.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*
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