Key Points
Dogecoin’s price has dropped more than 70% from its all-time high.
New ETFs, pro-crypto regulations, and lower interest rates could drive it higher.
Big purchases by whales suggest that brighter days are ahead.
Dogecoin(CRYPTO: DOGE), which was created as a meme-based parody of Bitcoin in 2013, has gone on a wild ride since its market debut. It started trading at about $0.0002, surged to a record high of $0.74 in May 2021, but now trades at about $0.21.
A $100 investment made back then would have briefly grown to $370,000 before shrinking to $100,000. A 1,000-bagger gain in less than 12 years is still incredible, but it might struggle to replicate those gains during the next decade. However, I think that doubling its price to $0.40 within the next 12 months remains a realistic target for five simple reasons.
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Image source: Getty Images.
1. The approvals for Dogecoin’s spot price ETFs
Several major crypto firms — including Grayscale, Bitwise, and 21Shares — submitted their applications for Dogecoin spot price exchange-traded funds (ETFs) to the Securities and Exchange Commission (SEC) earlier this year.
Those ETFs could boost Dogecoin’s price by attracting more retail and institutional investors. They would also make Dogecoin more comparable to Bitcoin and Ethereum, which were both cleared for their spot price ETFs last year.
2. The Trump administration’s crypto-friendly policies
The Trump administration is embracing cryptocurrencies with its planned launch of a Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile, and its appointment of Paul Atkins — a strong supporter of the crypto industry — as the new SEC chairman could clear the way for Dogecoin’s ETFs.
President Donald Trump has also been urging the Federal Reserve, which hasn’t cut its benchmark rates this year, to accelerate its rate cuts to spur economic growth. If the Fed finally starts cutting rates again, many investors will rotate back toward riskier assets like Dogecoin.
3. Social media buzz and celebrity endorsements
A lot of Dogecoin’s early growth was driven by big endorsements from celebrities like Elon Musk, Mark Cuban, and Snoop Dogg. Musk sparked big rallies with his unpredictable tweets about Dogecoin, had Tesla start accepting Dogecoin payments for some of its products in late 2021, and X (formerly Twitter) recently integrated Dogecoin payments into its platform. His creation and brief leadership of the controversial Department of Government Efficiency (DOGE) under the Trump administration generated even more buzz for the meme coin.
Dogecoin’s huge social media presence — which includes 2.7 million subreddit members on Reddit and 11.2 billion related views on TikTok — amplified those gains. That support from celebrities and social media users could drive Dogecoin’s price a lot higher on any positive developments.
4. The expansion of its developer ecosystem
Dogecoin is mined with the same energy-intensive proof-of-work mechanism as Bitcoin. But unlike Bitcoin, which has a maximum supply of 21 million tokens, Dogecoin is an inflationary token with nearly 150 billion coins in circulation and no maximum supply. Therefore, it can’t be valued by its scarcity like Bitcoin or other deflationary tokens.
Dogecoin also doesn’t support smart contracts, which are used to develop decentralized apps (dApps) and other crypto assets. That limitation is preventing it from becoming a major developer platform like Ethereum or Solana. The bears often argue that Dogecoin’s lack of a developer ecosystem will inhibit its growth potential. But that could change as Dogecoin, an official Layer 2 blockchain built on Polygon, tethers more dApps and crypto assets to its cryptocurrency.
5. The whales are accumulating Dogecoin
During the past year, some big anonymous investors — known as whales — ramped up their purchase of Dogecoin even as retail investors backed off. That more favorable sentiment isn’t surprising, since ETF approvals, interest rate cuts, Musk’s support, and the gradual expansion of Dogecoin’s developer ecosystem could drive its price a lot higher.
Considering that Dogecoin traded as high as $0.48 last December, a flurry of positive developments should easily drive it back to at least $0.40. I’m not saying it’s a great long-term investment yet, but I wouldn’t be too surprised if it doubles within the next year.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and Tesla. The Motley Fool recommends Polygon. The Motley Fool has a disclosure policy.