What Will the Price of Dogecoin Be in the Next Year?

With a price drop of 47% as of now, the Trump-inspired rally of Dogecoin (CRYPTO: DOGE) is quickly unraveling. While it is normal for volatile assets to give back some profits after a big move, this controversial meme coin is underperforming compared to many other coins. Is this dip a buying opportunity or a signal for investors to flee? Let’s delve deeper to see what the next 12 months may bring. Extreme volatility A rising tide can lift all boats, and the cryptocurrency industry is no exception. However, while digital asset prices tend to be highly correlated in the short term, some patterns are beginning to emerge in the long term. Meme coins like Dogecoin have historically seen spikes when market sentiment is bullish but collapse when the outlook turns bearish.

It is not easy to pinpoint the exact reason why this is happening. But it is likely related to the community of asset investors and its objectives. When launched in 2013, Dogecoin was intended to parody the cryptocurrency industry, not to solve any specific problems. This somewhat unserious perspective has become part of its brand, potentially influencing the type of investors who want to buy the asset. The delay in accepting the institution Unlike Dogecoin, other initial cryptocurrencies such as Bitcoin ( launched in 2009) and Ethereum ( launched in 2015) have garnered increasing public acceptance. Both assets have been approved for exchange-traded funds (ETF), opening the door for institutional investors such as pension funds, university endowments, and even national governments to add them to their investment portfolios. These organizations with abundant funds can stabilize cryptocurrency prices because they tend to hold long-term rather than sell off to make profits or pay for real-life emergencies. On the other hand, Dogecoin attracts more retail groups, easily influenced by statements from influencers like Tesla CEO Elon Musk, who frequently promotes Dogecoin to his 220 million followers on X (formerly Twitter). Although positive posts can drive the price of an asset in the short term, they are not enough to create sustainable value. Furthermore, the history of bullish and bearish trends of Dogecoin may have created a negative feedback loop, causing long-term investors to be fearful and attracting more short-term speculators looking to make quick profits. What about the basics? Although cryptocurrencies cannot be valued based on traditional stock market metrics such as revenue or income growth, that does not mean they lack fundamental factors. Unfortunately for Dogecoin investors, this highly volatile meme coin is not designed to be a good store of value. The circulating supply of Dogecoin is programmed to increase by 5 billion units each year. With approximately 148.5 billion units in circulation, the inflation rate is 3.3%, higher than the current US dollar. Although that number may seem small ( and will actually decrease over time ), the supply of the coin will increase over time, making Dogecoin less attractive compared to alternative cryptocurrencies with deflationary designs. Dogecoin is also not optimized for smart contracts, which are applications built on the blockchain network. And with a transaction speed of about one minute, it can outperform Bitcoin but is still significantly slower than newer alternatives like Solana, which can handle transactions in just a few seconds. What will next year bring? Although Dogecoin may outperform other cryptocurrencies in a bullish market, the speculative community, inflationary design, and lack of practical utility will cause it to underperform when the hype dies down. With the industry's excitement starting to wane after Trump's election, investors should expect Dogecoin to continue to fall in the coming months.