Dogecoin’s price slump has come to an end after Tesla chief executive and SpaceX founder Elon Musk announced on Twitter that the electric vehicle giant would be accepting the meme coin as payment for Tesla merchandise.
The cryptocurrency originally created as a joke to poke fun at the seriousness of cryptocurrency discourse enjoyed a solid boom period throughout 2020 as the controversial tech and crypto guru helped to increase hype around Dogecoin.
Dogecoin’s price has fluctuated between $0.26 and $0.16 in the months following its surge to $0.74 on May 8, dwindling in trading volumes as new coins such as Shiba Inu coin, dubbed the ‘Dogecoin killer’, entered the meme crypto scene.
But Elon Musk’s Twitter announcement on Tuesday (December 14) that Tesla will accept Doge for merchandise payments and “see how it goes” saw Dogecoin’s price surge by more than 20%.
Here’s what the meme cryptocurrency is, Dogecoin’s price today and its latest price predictions.
What is Dogecoin?
Much like Bitcoin, Dogecoin is an open-source cryptocurrency which can be traded and exchanged across decentralised peer to peer networks between users, with tokens of value reaped as rewards for users operating in lieu of banks or governments to ensure the validity of its transactions.
Paying tribute to the shiba inu ‘doge’ meme circulated far and wide across the internet for years, Dogecoin was created in 2013 as a satirical take on the booming popularity around more traditional coins like Bitcoin and their cult following.
But the coin has come full circle, with it now being taken just as seriously as its crypto competitors after its visibility increased worldwide over recent years.
Where this coin differs to Bitcoin or Ethereum is that it has spread like wildfire on account of its meme origins and appreciation by Tesla founder and cryptocurrency aficionado Elon Musk.
The irreverent tech billionaire earlier this year sent the crypto market into a tailspin when he announced that Tesla would be suspending Bitcoin payments for its vehicles due to the currency’s considerable environmental impact, and has routinely mocked Bitcoin while praising Dogecoin online and inflating the price of the memecoin.
And the founder of US aerospace company SpaceX also announced last year that he would be launching the first cryptocurrency-funded moon mission, known as DOGE-1, as a Dogecoin-funded CubeSat.
The Dogecoin-funded satellite payload aims to be the first CubeSat to reach space, with SpaceX collaborating with energy and space research development company Geometric Energy Corporation, Unizen and decentralisation incubator ZenX to create DOGE-1.
How much is it worth today?
Dogecoin’s price had plummeted in early December as the crypto market pulled back, reflecting traditional market concerns over increased financial risk due to rising inflation, the resurgence of coronavirus with the Omicron variant and increased scrutiny over cryptocurrencies from legislators worldwide.
Having fluctuated between $0.16 and $0.18 in recent weeks, Tuesday (December 14) saw Dogecoin’s price surge from $0.159206 at 10.33am to $0.198599 by 10.40am after Elon Musk’s announcement about Tesla Dogecoin payments on Twitter.
At 10.34am, the Tesla CEO tweeted: “Tesla will make some merch buyable with Doge & see how it goes”.
A Dogecoin price rally then saw the meme coin rise even further – hitting $0.217975 at 11.53am according to CoinDesk, before later falling back below $0.18.
As of 8.39am on Wednesday morning, Dogecoin’s price is hovering around $0.183174 (£0.138412) in a 14.36% rise on the last 24 hours, with a whopping 590% increase in Doge’s trading volume according to crypto data analysis and aggregator, CoinMarketCap.
According to Coinbase, Dogecoin is currently trading 3.68% up on the last seven days – but down 30.46% on the last month, with Doge trading at $0.26 (£0.20) on November 15.
But this is still a far cry from Dogecoin’s all time peak in early May, when the coin’s rapid rise saw it reach a peak of $0.74 on 8 May.
New alt and meme coin competitors have repeatedly emerged to eclipse Dogecoin’s successes, with ‘Baby Doge’ arriving on the market as the child of the resident memecoin, tipped as a new favourite of Musk for its deflationary status and design to increase its scarcity by avid hodling of the pre-mined coin.
But Dogecoin’s continued price fall has seen fans and investors alike fear for the long-term success of the cryptocurrency.
Will Dogecoin stay up? Dogecoin price predictions
Dogecoin price predictions following this continued period of stagnation have seemingly put hopes of the coin finally reaching $1 worth or above anytime soon slightly further out of reach.
The closest the cryptocurrency came to nearing that landmark threshold was seen in early May, before China’s latest moves to stunt the flow of transactions and mining began to shake the market, with this latest bout of volatility adding to rising fears over the long term health and sustainability of the crypto market and whether there’s more instability to come.
Wallet Investor forecasts that Dogecoin’s price could go up to $0.5 within a year and up to $1.511 by 2026, according to estimations of its bullish support.
Other forecasters are more hesitant in their forecasting, predicting that DOGE might not reach $1.2 in value until closer to 2028.
However, the negligibility of meme coins like Dogecoin means that they carry an even greater risk for investors - with much greater volatility in value and less predictability in pricing.
Speaking yesterday on the Dogecoin price rally following Musk’s tweet, Steve Gregory, chief executive officer for the US at crypto exchange Currency.com, said: “Dogecoin rallied by more than 20% this morning, likely off the back of Elon Musk’s recent tweet.
“In our view, the rally is unwarranted and purely driven by hype rather than fundamentals.
Mr Gregory continued: “Created at a fixed rate of 10,000 per minute in perpetuity, the supply of DOGE is unlimited, which in itself could be subject to change.
"This is why we think it cannot ‘sound money’.
"Just as the central bank can print money and artificially inflate prices by deflating the value of the fiat currency, new DOGE can forever be created, ultimately undermining its value.
The currency.com CEO added that Tesla’s support of Dogecoin as a payment method is a “questionable choice” and decision from Musk.
"For the purposes of payments there are far more efficient protocols than DOGE, including protocols with faster block processing and larger block limits as well as programmable smart contracts which may be better suited for payment transactions,” he said.