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Dogecoin (CRYPTO:DOGE) is the 10th largest cryptocurrency in the world with a market capitalization of $8.2 billion. For a meme token that was originally created as a joke, that’s a pretty incredible feat.
That said, like many tokens, Dogecoin has lost the vast majority of its value. Trading as low as $0.74 at the peak of crypto mania last year, DOGE has since slipped as low as $0.05 per token this year. This is good for a decline of more than 90% from its peak, where Dogecoin is currently trading.
Now, the question many investors are asking is, where does this token go from here? Are new all-time highs in order for this dog-inspired token? Or could another 90% decline from here take place?
Let’s dive into it.
Dogecoin: the Elon Musk token
It is undeniable that You’re here CEO Elon Musk is driving much of the price action with Dogecoin. With a single tweet (positive or negative), Dogecoin tends to move double digits in one direction or another. Given Elon’s overwhelmingly positive support for Dogecoin, investors in this meme token are watching his rhetoric closely.
A number of occasions have taken place this year, which validates this point. For speculators, this can certainly be an interesting asset for trading.
However, for longer-term investors, the fact that tweets can shift the value of a given asset to such a degree and with such consistency can be worrisome. All it would take is one tweet from Musk decrying support for Dogecoin, and it could all come crashing down.
Indeed, there is an extremely high risk in trading this crypto. Most investors already know this.
But there are catalysts
One of the most compelling recent catalysts is the announcement of Coinbase that Dogecoin will be accepted as payment for the company’s business solutions. Coinbase Commerce aims to bring businesses and consumers together in the crypto economy. As a result, it makes cryptocurrency transactions more accessible and easier while integrating new cryptos as payment options.
Other digital tokens have been included in the range of options made available. However, for meme token holders, the addition of Dogecoin is a big deal.
This is mainly because this token doesn’t have much use. A lack of real-world use cases is something that has driven this token to a greater extent than the overall market lately. So, if further integrations take place, investors may have more catalysts on the horizon.
At the end of the line
There is no doubt that Dogecoin is one of the most speculative assets an investor can look for right now. Indeed, there are some catalysts to point out. However, the long-term trajectory of this token really depends on factors beyond Dogecoin’s control. Thus, this asset does not meet my criteria for potential participation.