Since the start of 2021 Dogecoin has been making a name for itself. The cryptocurrency that started as a meme is now becoming a dominant player in the crypto markets. With a current market capitalization of nearly $84 billion, Dogecoin is now the fourth largest cryptocurrency by market capitalization. As of May 5th 2021, Doge is hovering around .65 cents which is over 325 times what it was trading at a year ago. With all the recent hype around the coin many believe Doge will soon hit $1 per coin. Although many do not consider Doge to be a serious contender in the race to be a real currency, I would like to entertain the idea that Doge is.
Deja Vu in Crypto
A decade ago cryptocurrency was new and anyone who was buying Bitcoin was looked at like a lunatic. Today, we think “if only I had put in a little money into Bitcoin…” as we regret not considering cryptocurrency at all. Dogecoin is on a somewhat similar path. It started out as a joke, not to be taken seriously and meant to be worth nothing. However, it has doubled in value time and time again reaching more and more people who hear about it and invest a little bit. It is time to look at Doge in a more serious light…
Dogecoin as a Real Currency? Here Are My Thoughts.
The following ramble is highly speculative and is really just a devil’s advocate to speak about an unpopular idea. First, real paper currency has a value of zero. Paper currency is just that, paper. So what gives currency its actual value? The main answer to this question is wide acceptance and wide utilization. In essence, we accept currency has value and we actually use currency to buy goods and services.
So how does this relate to Doge? A lot actually. Recently, multiple brokerages (ie: Robinhood) have added Dogecoin to be traded on their platform. This has allowed hundreds of thousands of new people to trade Doge. In addition, some companies have begun to accept Doge as payment but these are outliers. These events have created a significant increase in how accepted Doge is. Considering how accepted Doge was as a currency just a year ago, Doge is doing great right now. Not to mention the effect Elon Musk has had on Doge in indirectly getting thousands of people to buy into the cryptocurrency. Despite all of this progress in acceptance, not much has changed regarding utilization. Doge still cannot be used for common goods and services.
I feel Doge has a greater opportunity to become usable than most of us let on. When compared to Bitcoin, Doge isn’t too far off the mark in being a good candidate for a widely used currency. Doge actually has some benefits over Bitcoin, like the fact that 5 billion Dogecoins are added to the supply every year. This inflation would help with volatile demand but I digress. Like Bitcoin, Doge is becoming evermore accepted and also like Bitcoin it keeps breaking expectations. Whether you like it or hate, Doge has become a serious player in the crypto space currently. It may even have hit a similar popularity as Bitcoin which may also bring a certain seriousness to the coin.