Dogecoin is one of the most popular cryptocurrencies according to many metrics. Traders judge cryptocurrencies on many criterion, all of which sites like CoinGecko specialize in tracking. According to CoinGecko, Dogecoin is 2nd only to Bitcoin. It boasts an active community, which has banded together to achieve a number of incredible goals–such as sponsoring NASCAR driver Josh Wise. Despite these successes, the Dogecoin price has fallen tremendously over the past several months, which does not make logical sense to many now-enlightened shibes.
Dogecoin has been called the “wingman” of cryptocurrency. While Bitcoin and other “serious” coins go to the bar to compete with one another to land the most attractive woman, Dogecoin just wants to have a good time. None of the other coins considers Dogecoin to be a legitimate threat to his success, so they are happy to let him tag along, which in turn builds him a strong network of friends–or in cryptocurrency terms, a large community. Unfortunately, eventually the wingman has to leave the bar and deal with life’s realities. For a currency, many of those realities are centered around the coin’s price and volume.
For Dogecoin, reality is becoming quite serious. During January, things were great. The Dogecon price was tagging along with the Bitcoin price during the great bull run of 2014, but unfortunately, it crashed just as hard as Bitcoin once the bull run was over. In April, the Dogecoin price rose again to almost $.0007 but has steadily declined since then. At present, the Dogecoin price rests at $.000358–its lowest since January.
There are no clear-cut explanations for Dogecoin’s price reduction. It’s possible that the increasing number of altcoins coming into circulation is diluting the market and potential Dogecoin holders are turning elsewhere. Alternatively, investors may not be confident that a coin based on an internet meme can find long-term mainstream success other than as a tipping tool on social networks. Nevertheless, there are five reasons why the Dogecoin Price should be much higher and could be poised to rise again soon.
For a coin to survive long-term, it must have a strong community. Otherwise, the coin will become a pump-and-dump. Of all the major cryptocurrencies, Dogecoin has the friendliest and most-welcoming community. This helps the Dogecoin community gain new members and retain them effectively. At present, the /r/Dogecoin subreddit has over 87,000 subscribers, and over 165,000 people follow the official Dogecoin Twitter. The Dogecoin community is also very involved in tipping and marketing opportunities.
Though Bitcoin has taken a major marketing step with BitPay’s sponsorship of the Bitcoin St. Petersburg college football bowl game, Dogecoin has clearly taken the lead when it comes to marketing. In addition to sponsoring NASCAR driver Josh Wise, Dogecoin sponsored the Jamaican Olympic dogsled team and is considering sponsoring a car in the Australian V8 Supercars series.
Moreover, the forthcoming documentary Coined: The Story of Cryptocurrency plans to prominently feature interviews with Dogecoin personalities like Billy Markus and Josh Wise. Coined will achieve a theatrical release, spreading the word about Dogecoin and other cryptocurrencies to people who might otherwise be unfamiliar with them.
Bitcoin might rule supreme over the altcoins in price and total market cap, but when it comes to tipping, Dogecoin is king. Dogecoin’s market saturation–there are currently 83,119,331,277 DOGE in circulation as I write this–creates a perfect climate for social media tipping. People in the Dogecoin community have created tipping apps for Reddit, Twitter, Facebook, and even Steam. You can send someone 100 DOGE without dipping far into your pockets, but the receiver still feels appreciated. This is a feature that Bitcoin cannot claim. For example, a $.50 tip currently equals out to 0.0008214 BTC, or a little over 1,400 DOGE. The vast majority of people would–at least subconsciously–rather receive the DOGE tip. With over 80 billion coins, the Dogecoin price will most likely never rise high enough that tipping is no longer fun. Dogecoin now faces competition from other tipping currencies such as Reddcoin and Karmacoin, but their market cap and trading volume are so low that they currently are not much of a threat.
A coin is only currency if you have a reasonable opportunity to use it as a medium of exchange. Currently, Bitcoin is the only coin widely accepted by businesses. However, more businesses accept Dogecoin than almost any other altcoin. Businesses can also accept Dogecoin using payment services such as Moolah (although Moolah and the Dogecoin community have sparred at times). Regardless, increasing acceptance by businesses should drive the Dogecoin price up, not down.
When a coin’s price and trading volume fall, the community should worry. However, despite the low Dogecoin price, DOGE’s trading volume remains quite high. According to CoinMarketCap, over 970 million DOGE–nearly $350,000 in USD–have changed hands in the past day. Though it is a far cry from Bitcoin’s nearly $16.5 million in 24-hour trading volume, it is an indication that the community is alive and trading.
Based on Dogecoin’s current price trend, the future does not seem bright. However, when you look past the price and examine the state of Dogecoin as a whole, things do not look quite so bad. Dogecoin has an excellent community structure, and it seems to have found its niche as the “tipping coin.” Though marketing campaigns have not affected the price much yet, they have brought Dogecoin to audiences that otherwise would not have heard about it. Additionally, Dogecoin trading volume has remained at moderately high levels, even during the downswing. Though no one can accurately predict the future, this evidence indicates that Dogecoin is resilient. You should not be surprised to see a Dogecoin bull run in the near future.
Disclaimer: The author is bullish on Dogecoin but doesn’t currently have much invested in it. Maybe he should take some of his own advice!
Last modified: June 20, 2014 11:43 UTC