Dogecoin (DOGE) shot to prominence during the 2021 bull market after launching a spectacular run driven by billionaire Elon Musk’s tweet about the coin. But, as the bear market has continued, the meme coin has lost the majority of its profits. With Dogecoin trading at about 90% of its all-time high in May 2021, the question now is if DOGE can ever reach $0.7 again.
Dogecoin is one of the top cryptocurrencies in the market, but a concerning truth about the cryptocurrency is that it has an infinite supply. Unlike Bitcoin, whose quantity is capped at 21 million, or Ethereum, which has established a burn mechanism to keep supply low, the meme coin has no such limit.
To put this in context, the DOGE supply is now expanding at a rate of roughly 5 billion coins per year. This equates to an annual inflation rate of 4%, which is rather significant, especially because there is no means to cut supply.
Nevertheless, because the meme coin is primarily driven by hype, its price swings rely less on tokenomics and more on how the community feels about it. Shiba Inu, for example, has a total supply in the trillions but has seen enormous success in the 2021 bull market as well.
The likelihood of DOGE recovering $0.7 is high, considering that it continues to receive backing from figures such as Elon Musk even during the bad market. It has also lately received endorsement from Burger King, one of the world’s largest fast-food restaurants, raising its pricing.
So far, the price of Dogecoin has been associated with the performance of the overall crypto market. Most coins have dropped drastically from their all-time highs in 2021, and DOGE is no exception. Yet, more crucially, the meme coin continues to track Bitcoin’s price movements. This means that when bitcoin ultimately recovers, DOGE will likely follow behind.
In March, the meme coin experienced a rollercoaster ride. Mid-March saw some increases for the digital asset, but the recent decline has erased most of those gains, leaving Dogecoin in the red once more.
DOGE is currently trading at $0.0843, down 0.97% in the last week and down 0.88% year to date. Although outperforming others, DOGE has been one of the poorest performers among large caps during the last week.
