What Would Happen If Dogecoin Captured 1% More of the Crypto Market?
Dogecoin (DOGE) is currently ranked 10th in terms of market cap among all cryptocurrencies. However, the crypto market is constantly changing, with capital flowing in and out of different projects. With a market value of $11.40 billion, DOGE holds 0.72% of the entire $1.567 trillion crypto market. Each Dogecoin is priced at $0.0798, and there are 142.825 billion DOGE in circulation.
Supply and Demand Impact on Dogecoin’s Price
Supply and demand play a significant role in driving the price of Dogecoin up or down as funds move between different cryptocurrencies. Bitcoin, for example, captures about 52% of the total market cap, making it one of the most dominant cryptocurrencies with a valuation close to $820 billion.
If Dogecoin were to capture just an additional 1% of the total crypto market value, its market cap would increase by $15.67 billion, reaching $27.07 billion. This potential capital inflow could push DOGE’s price to $0.1895, assuming that its circulating supply remains constant.
Challenges Faced by Dogecoin
However, Dogecoin faces challenges due to constant increases in its circulating supply, which leads to higher market caps despite similar or lower prices. This is because mining issues a fixed rate of 5 billion DOGE annually, resulting in a 3.5% inflation rate.
Despite this challenge, Dogecoin has consistently outperformed other cryptocurrencies when compared to the total crypto market cap index. It has absorbed capital into its ecosystem and even experienced less retracement compared to the overall market during the 2021 peak. Since its inception, DOGE has outperformed the index by 161% and increased its dominance.
The Need for Increased Demand
For Dogecoin to continue seeing an inflow of capital and capture an additional 1% of the total crypto market cap, it must find increased demand that surpasses its supply inflation. Only then will its prices reflect the potential capital inflow mentioned earlier.
Hot Take: Dogecoin’s Potential for Growth
Dogecoin has become a significant player in the crypto market, currently ranking 10th in terms of market cap. With its strong performance and ability to absorb capital into its ecosystem, DOGE has proven itself as more than just a meme coin. While it faces challenges due to its inflationary supply, if Dogecoin can continue to find increased demand, it has the potential to capture even more of the total crypto market. This would result in significant growth and higher prices for DOGE, making it an intriguing cryptocurrency to watch.
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