Until recently, Dogecoin (DOGE) had lagged behind Bitcoin’s (BTC) performance over the past year, but the leading meme coin has been catching up over the past month.
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The dog-based meme crypto’s value has more than doubled over the period, helped along by another endorsement from its most high-profile fan. During a recent tour of Tesla’s Berlin gigafactory, when asked whether customers might be able at some point to buy a Tesla car by paying with DOGE, CEO Elon Musk said that it might become possible in the future. Tesla already accepts Dogecoin payments for its merchandise.
Musk appears again in another instance boosting confidence in DOGE. X Payments, the subsidiary of X responsible for spearheading the peer-to-peer payment business, has successfully obtained three additional licenses for money transmitter activities. It is now licensed in a total of 22 states and the company is gearing up to introduce payment features throughout the year. DOGE fans are evidently speculating it could be a payment option on X.
While the crypto market’s leading coins went through a bit of a correction last week as concerns around big outflows from the U.S. Spot Bitcoin ETFs dampened sentiment, DOGE’s upward trajectory has continued, pushed along by other positive development.
On March 7, Coinbase submitted a filing with the Commodity Futures Trading Commission (CFTC) to introduce cash-settled futures for Dogecoin, Litecoin, and Bitcoin Cash. The leading crypto exchange plans to roll out Doge futures and other contracts by April 1, highlighting the OG meme crypto’s legitimate status.
So, could all this bullish sentiment result in Dogecoin eventually surpassing its May 2021 all-time high of $0.7376 and reaching the holy grail of $1 per coin?
Looking at its long-term prospects, investor and stock researcher Neil Patel is not that certain. “I think the only way that Dogecoin can reach $1 in the next six or so years is if it gains status as a popular portfolio addition in the same way that Bitcoin has,” he said.
Patel points out that DOGE began as a joke and is unlikely to be seen as a legitimate financial asset like Bitcoin has now become. There’s also a big difference between the two to consider. Bitcoin has a fixed supply cap of 21 million, while Dogecoin has nearly 144 billion tokens in circulation and every minute 10,000 new coins are added.
“For Dogecoin’s price to skyrocket, demand would need to outpace rising supply. That’s a tall task,” Patel goes on to say. “In my view, then, there are no fundamental reasons to be long-term bullish about Dogecoin. In fact, it’s very unlikely the token will rise 600% to reach $1 by 2030.”
While that is a valid argument, it’s unlikely DOGE’s creators or early crypto enthusiasts saw the joke coin ever reaching its current market cap of ~$24.68 billion. Additionally, the crypto sector can get very frothy when the bulls pick up steam, so anything from soul-crashing swoons to “Dogecoin to the moon” gains cannot be ruled out entirely.
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
