on the crypto
Throughout 2022, the popular meme coin Dogecoin all but disappeared from the radar of serious investors, who sought less risky assets during the market downturn. Dogecoin is now down 90% from its all-time high of $0,74 and is trading at just $0,07.
While Dogecoin has experienced some brief spikes throughout 2022 – mostly thanks to news related to Elon Musk and Twitter – it is clear that this cryptocurrency faces its moment of truth in 2023. It has been nearly a decade since its launch and the coin digital has never crossed the threshold of 1 dollar. If he wants to make it in 2023, at least three things have to happen.
1. A cryptocurrency market rally
First, the cryptocurrency market needs to rebound in 2023. The perfect setup for a meme coin rally includes bubbling, speculative sentiment that attracts new retail investors hoping to get rich quick. This implies a bull market rally that pushes all coins higher at once, garners a lot of media attention, and encourages retail investors to get back into the market.
2. The Elon Musk factor
The second big factor has to do with Elon Musk, who has become one of Dogecoin's most high-profile supporters. Musk has often promoted Dogecoin's features and benefits, even going as far as proclaiming himself “the father of Dogecoin” prior to an appearance on NBC's Saturday Night Live in May 2021. That show ended up marking the peak of the latest Dogecoin craze.
It is therefore no surprise that Musk's $44 billion takeover of Twitter has become a major catalyst for Dogecoin's price action in 2022. The cryptocurrency experienced a brief surge upon the announcement of the deal in April, after Musk hinted that Dogecoin would be integrated into Twitter at some point.
The cryptocurrency had another surge in October when the deal was finalized. But it never exceeded $0,15. Therefore, for Dogecoin to go down to $1, Musk will likely have to announce a plan for full integration of the cryptocurrency into Twitter, where the token becomes the payment option of choice for Twitter users around the world.
3. A technology upgrade for Dogecoin
The last piece of the puzzle is a potential major technology upgrade for Dogecoin. At present, its only value is as a payment option. A growing number of merchants accept it as a form of payment, but its usefulness elsewhere is extremely limited.
For Dogecoin to cross the $1 mark, it needs to expand the number of uses of its blockchain and tap into the full potential of the blockchain and crypto space, including decentralized finance, non-fungible tokens (NFTs), and the Web3.
How realistic is the $1 threshold?
All in all, it seems unrealistic that Dogecoin would jump from the current price of $0,07 to $1 in 2023. This price would mark a new all-time high. Furthermore, it would imply a new market capitalization of $132 billion, which would make Dogecoin the third most valuable cryptocurrency in the world, after only Bitcoin and Ethereum.
Invest in cryptocurrencies it is risky and speculative, especially with meme coins like Dogecoin. At least three big things need to happen for 2023 – a market rebound, a Twitter integration, and a technology refresh – and none of them seem particularly likely at the moment. There are other places to put your money in the cryptocurrency market that aren't quite as speculative.
