Its use cases remain limited, mainly because there is no way to interact with smart contracts on Dogecoin, despite a nearly 45% rally over the past month.
One of the biggest surprises of 2022 is Elon Musk’s $44 billion purchase of Twitter, a social media juggernaut. Dogecoin has come under scrutiny due to the takeover, which has fanned many debates, particularly about censorship involving Big Tech.
It is essential to remember that DOGE was trading at $0.07 just hours before Musk tweeted, “the bird is freed” on Oct. 27. Its value had risen to a sizable $21 billion by Nov. 1, when it reached $0.16. In addition, while DOGE is trading near $0.08 at the moment, its 30-day profit ratio was greater than 40% at the end of last week.
The 30-day profit ratio of DOGE, despite its current price of $0.08, is more excellent than 40%.
Additionally, the digital asset’s value has skyrocketed every time Musk tweets about it. A message he sent throughout 2021 made DOGE the “people’s crypto,” sending its value soaring by more than 4,000%.
Moreover, Tesla’s “Giga Texas” belt buckles and miniature vehicle replicas will begin accepting DOGE payments in January 2022, along with Tesla’s other merchandise. DOGE could also be used to purchase Musk’s most recent fragrance, Burnt Hair.
Is DOGE’s Future Bleak?
Lior Yaffe, the co-founder of Swiss blockchain software company Jelurida, spoke about Musk’s Twitter takeover and his support of DOGE. The poor decision-making of Musk makes Yaffe less optimistic about Dogecoin.
Furthermore, he claimed he would be surprised if Musk could bring any actual use cases to Dogecoin, noting that Musk may not be able to achieve such a dream shortly even if he intends somehow to integrate Twitter with crypto payments – an arduous task. It would be better to utilize other blockchain solutions for security, privacy, smart contracts, and scalability, even if they could build a payment system around Twitter.
In light of the current macroeconomic environment, Henry Liu, CEO of cryptocurrency exchange BTSE, predicts that DOGE will continue to trade at a high level of volatility. This is much in line with the broader cryptocurrency market.
Over the short term, DOGE is expected to remain speculative, with reduced liquidity and trading volumes. “We may see a spike driven by social media communities if DOGE is given new utility in its collaboration with Twitter,” he said.
Read Also: Throughout the next few months, Twitter will do lots of dumb things: Elon Musk
There Are Only a Few Skeptical People
While it is impossible to discount the fact that meme tokens grow suddenly and unreasonably, Nikita Zuborev, chief analyst at BestChange. Due to Musk’s recent acquisition of Twitter, DOGE may see a boost in price. This is because one must consider integrating the asset into the firm’s social network ecosystem in the future.
Zuborev furthered his argument by pointing to the upcoming SpaceX-backed Doge-1 lunar satellite launch as an example of how the brand is closely tied to the coin. These moves will stimulate DOGE’s market, which will boost the price.
Nonetheless, he acknowledged that adding the currency to a portfolio to diversify. It was prudent as long as the currency’s primary selling point remained its meme-centric outlook. Nevertheless, he needs to consider DOGE a worthwhile investment.
Aside from Dogecoin, Musk has also mentioned Bitcoin several times, which is much more stable and can be easily integrated into Twitter. Especially if Musk continues to manipulate the market, it can be considered an alternative to DOGE.
There is No Doubt That DOGE’s Utility is Limited
Since Musk has an affinity for Dogecoin and recently took control of Twitter, it makes sense that speculation about the asset’s price will continue for some time. Although, Daniel Elsawey, co-founder and CEO of decentralized exchange TideFi, agrees that Dogecoin’s operational utility is limited as a crypto project.
Cryptocurrency today can be divided into two distinct categories: those with smart contracts and those without. This is what stands to tip the adoption curve of digital assets toward one side or the other in the future, in his opinion. This is because the market is moving toward tokenizing items in our daily lives.
Lastly, given that the crypto industry is still in its relative infancy, it remains heavily dependent on Bitcoin, tracing its price movements quite heavily. Moreover, volatility continues to pervade the market due to the recent downfall of the crypto exchange FTX, which will directly affect the price of most cryptocurrencies in the near to mid-term. “Dogecoin is no different in this respect. There is still a lot of uncertainty surrounding the asset,” Elsawey concluded.
Read Also: 90% of Twitter’s Indian staff have been fired; only a few remain
Dogecoin’s future will be exciting in the coming months as we move through a period of economic turmoil — across multiple financial sectors — especially because projects with limited use cases are seemingly being wiped out of the market with each passing day.