I think Dogecoin is quite funny. It brings a smile to my face when I see dead-serious businesses and rich people talk about this meme coin. Anyways, there’s a lot of hype around it these days, so I was thinking: Can Dogecoin reach $10?
Yes, Dogecoin can reach 10 dollars, at least in theory. The price of Dogecoin is largely based on hype and network effect, which by nature is an exponential force far beyond our comprehension. The main problem is the large supply of DOGE, which increases every year. The market capitalization of a theoretical $10 DOGE, with the current supply, is 1.3 Tillion USD.
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Is It Realistic For Dogecoin To Reach $10?
To figure out how realistic it is that Dogecoin reaches ten bucks we’ll have to do some simple math. Now, don’t freak out, we’ll take it slow!
Important: The price of something tells you little about the worth of something, at least in the crypto market. What you need to check is the “market cap”.
The market cap of a cryptocurrency is the value of all the coins in circulation combined:
Market cap = Circulating supply * price per coin
Let’s calculate Dogecoins market cap if the price per coin was $10:
DOGE Market Cap At $10:
According to CoinMarketCap.com, the circulating supply is 130 Billion DOGE.
Given a price of $10 the market cap is 10 * 130 Billion = 1.3 Trillion USD.
In other words:
If Dogecoin reaches $10, the market cap would reach $1.3 Trillion with its current supply.
At the time of writing, that’s bigger than Bitcoin:
However, it gets even worse…
The Supply Of DOGE Increases Over Time
The circulating supply of DOGE increases by 5 Billion coins every year. The fact that it’s a constant of 5 billion means that inflation goes down over time.
The graph below shows the circulating supply of Dogecoin from 2020 to 2030, together with its inflation rate:
As you can see, the supply increases at a constant rate, but inflation is decreasing every year.
Now, using the chart above, we can calculate the market cap of Dogecoin at $10 bucks depending on when it happens:
|2021||1 300 000 000 000 USD|
|2022||1 350 000 000 000 USD|
|2023||1 400 000 000 000 USD|
|2024||1 450 000 000 000 USD|
|2025||1 500 000 000 000 USD|
|2026||1 550 000 000 000 USD|
|2027||1 600 000 000 000 USD|
|2028||1 650 000 000 000 USD|
|2029||1 700 000 000 000 USD|
|2030||1 750 000 000 000 USD|
A market cap of 1.75 Trillion Dollars for a meme-coin seems too good to be true, right?
Well, it depends on how you look at it:
Dogecoin follows the growth of Bitcoin to some degree. If Bitcoin reaches $1 million, there’s a high chance we’ll see a DOGE well into the “multi-dollar” territory.
Also, remember what’s driving the price of Dogecoin – The network effect:
People don’t buy DOGE because of its awesome fundamentals, or its ability to “change the world”. No… People buy DOGE because it is fun!
It’s sort of like gambling, but with a lot more winners.
However, in this type of gambling, you’re rewarded for inviting more “players”, starting some sort of network effect. It’s almost like a pyramid scheme, only that it really isn’t.
The actual value of the Dogecoin network also increases in tangent with this network effect:
Basically, if more people buy DOGE, more businesses will try to implement DOGE into their services, leading more people to buy Doge, etc.
The great thing about networks is that they are exponential by nature. It grows faster and faster. 2 becomes 4, which becomes 8, 16, 32, 64, 128, 256, 512, etc…
If you don’t think that the network effect grows fast enough, or that exponential growth isn’t enough, think about this:
Let’s pretend it’s possible to fold a piece of A4 paper an unlimited number of times. When you fold it, it gets taller (or thicker). Twice as tall, to be precise.
Now, here’s a question:
How tall do you think the folded paper would be if you folded it 43 times?
Most people guess about 10 inches high.
Well, if you fold a paper 43 times, that paper will reach the moon…
I’m not kidding. If you fold a piece of paper 43 times, the height of that paper will be the same as the distance from the earth to the moon!
Another eye-opening thing about this: If you only fold it 42 times, it will reach halfway to the moon.
In other words: the last fold alone gets you equally as far as the first 42 folds combined.
Now think of this in terms of the network effect on the value of Dogecoin, or other cryptocurrencies for that matter. Still think it’s impossible to reach $10?
Can Ethereum Reach $100K?
Dogecoin price in realtime (from CryptoRunner)
Conclusion: Yes, Dogecoin Can Reach $10
Due to the exponential nature of the network effect, which is the main driver of Dogecoins price, it is possible for Dogecoin to reach ten dollars. However, due to the large supply, which is ever-increasing, the market cap would have to grow larger than 1.3 trillion USD. In order for Dogecoin to have the chance to do this, Bitcoin needs to get closer to $1 million per coin, in order for other cryptocurrencies to have room to grow.
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