Dogecoin's Value Increases by an Astounding 350% in 2021. Could It Outperform Bitcoin in 2025?
The cryptocurrency market is experiencing a monumental surge, with a total market cap of all digital currencies reaching an impressive $3.5 trillion. A substantial portion of this staggering figure, approximately $1.9 trillion, is attributed to the indomitable leader of the cryptocurrency realm, Bitcoin.
Presently, Bitcoin is ruling the crypto world, more than doubling its value this year. While some of the more speculative and risky cryptocurrencies have managed impressive growth, none have outperformed Bitcoin like Dogecoin. Created as a jest in 2013, Dogecoin has astoundingly delivered a mind-blowing 350% return this year, making people grin from ear to ear.
Two heavyweights in the tech and political sphere, Elon Musk and President-elect Donald Trump, are heavy influencers behind Dogecoin's stunning rally.
Elon Musk's affinity for Dogecoin emerged in 2021, where he frequently promoted the cryptocurrency on social media, appeared in a Dogecoin-themed comedy skit on Saturday Night Live, and even proclaimed it his favorite coin. Dogecoin skyrocketed 15,769% between its start at $0.0046 and a record-breaking high of $0.73 on the night of Musk's SNL appearance. However, investors abruptly realized that Musk lacked a concrete plan to support his verbal backing, causing Dogecoin to plummet by 92% in mid-2022.
In recent times, Dogecoin saw a resurgence following Trump's election win in November. Speculators believed that the Trump administration's light approach to regulation would facilitate further use cases for Dogecoin, thus bolstering its value. Elon Musk became Trump's advisor, heading an entity called the "Department of Government Efficiency" or DOGE, further fueling Dogecoin's rally, despite there being no indications of the token's role in the department.
Comparatively, Dogecoin lacks fundamental substance, whereas Bitcoin boasts real upside catalysts. Despite Dogecoin's impressive growth in 2024, it has yet to entirely recover from its 2022 plunge. On the other hand, Bitcoin continues to smash new record highs, edging ever closer to a landmark price of $100,000 per coin.
The lack of fundamentals plays a significant role in Dogecoin's failure to rebound fully from its 2022 dip, whereas Bitcoin boasts an expanding list of positive catalysts. Meanwhile, neither cryptocurrency has managed substantial adoption as a medium of exchange, with only 8,875 merchants worldwide accepting Bitcoin and 2,515 accepting Dogecoin.
However, Bitcoin has proven its worth as a true store of value. This year, the Securities and Exchange Commission approved several Bitcoin exchange-traded funds (ETFs), making it easier for financial advisors and institutional investors to own the cryptocurrency, potentially paving the way for broader adoption.
Recently, several top Wall Street analysts have expressed optimistic Bitcoin price predictions, with Cathie Wood's Ark Investment Management suggesting that Bitcoin could surge to almost $1.5 million per coin based on eight potential use cases. These use cases include Bitcoin being adopted as a digital version of gold, a store of value by companies, governments, and institutional investors, and a part of the investment industry's asset base.
2021 served as a stark lesson in the dangers of speculative frenzies, and Dogecoin's 2024 rally resembles that observed in 2021. The token lacks any new use cases to support its impressive growth, creating a cause for concern amid fears of another steep decline, much like the one that took place in 2022.
On the flip side, Bitcoin's rolling list of catalysts for upward movement is growing. If it were to be accepted as digital gold, this could open the door to substantial growth in 2025 and beyond. Currently, the total value of all mined gold reserves is almost $18 trillion, requiring Bitcoin's market cap to increase by an astronomical 850% to reach this level, implying significant potential for Bitcoin to appreciate in the future.
In conclusion, while Dogecoin's rally in 2024 feels eerily reminiscent of its eruption in 2021, Bitcoin's list of positive catalysts continues to grow. If it evolves into a widely accepted digital version of gold, this would likely lead to substantial growth in the years to come.
In the realm of finance and investing, many individuals are closely monitoring Bitcoin's progress, as it continues to break new record highs and edge closer to a $100,000 price per coin. On the other hand, while Dogecoin has shown impressive growth, its lack of fundamental substance and reliance on speculation has caused concerns, particularly after significant dips such as the one in 2022.
