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Can Elon Musk Make Dogecoin a Winner in 2022?

Can Elon Musk Make Dogecoin a Winner in 2022?

During the start of 2021, the Dogecoin cryptocurrency and the mascot of Shiba Inu, had grabbed the attention of the investors. It was followed by the price skyrocketing to about USD 0.74, which was a significant return because the Dogecoin price was merely a fraction of the penny at some point during 2019. Elon Musk, the founder of Tesla and SpaceX and tech wizard, had been on this ride for long, and he lists Dogecoin among the three crypto-assets he owns. 

The price hike of Dogecoin resulted from the tweets of Elon Musk while he has promised to help improve this network. However, the question arises that whether he would be able to turn the coin into the winner now that its price has gone down to about USD 0.17. 

All Set To Grow Dogecoin 

Dogecoin is a digital currency running on a decentralized network like any other cryptocurrency. Crypto users can transfer money instantly through the network to one another across the globe using an internet connection. In 2013, two developers had started to mine Dogecoin as a joke. Musk quoted that he decided to get involved with Dogecoin specifically as he found that many workers in the production line of Tesla owned the currency. 

Elon Musk had been working with developers reportedly since 2019 for Dogecoin, and he even offered to help with more funds for the further development of this network. Although the founders declined his offer, they have taken his advice of trying and increasing the TPS (transactions per second) on the network of Dogecoin to make this network run on energy efficiently. It has been a notable issue for the crypto networks such as Bitcoin as the miners utilize significant computer power for solving cryptographic puzzles to get new tokens. 

The media outlets have confirmed recently that Dogecoin is planning to transition its network from its concept of proof-of-work mining involving significant computing power for the concept of PoS or Proof-of-stake. In PoS, the cryptocurrency owners wager their tokens to validate the network and approve transactions while creating new tokens and blocks.  

Even though Dogecoin has experienced a decline in the last few months, Musk has not lost interest in it. He has instead used influence for making it more commercially viable. In an announcement made in January, Tesla quoted that The company will accept Dogecoin to purchase some merchandise. It resulted in a price hike of Dogecoin by about 15%.

Can Dogecoin Be The Big Winner?

Without disagreeing with Musk, it can be hard to see Dogecoin become the winner. One of the main reasons is that Dogecoin does not possess anything that makes it stand apart from various other cryptocurrencies in the market. 

If you see from the perspective of functionality, Dogecoin has nothing exciting. Although it processes more TPS than Bitcoin, many cryptocurrencies can process way more TPS. Besides, unlike Ethereum, Dogecoin lacks intelligent contract capabilities, and therefore, programmers are unable to utilize it for creating decentralized applications, i.e. dApps. Although its network is transforming into a PoS concept, it will take something most of the other blockchain networks will eventually adopt as mining has become very much energy-intensive. 

Besides, Dogecoin lacks the proper supply and demand forces if seen from an investor's perspective. Currently, over 133 billion Dogecoin tokens exist, and the amount is going to rise by five billion in a year. So, the token is considered as the barrier against inflation is unlikely.

The vital aspects behind Dogecoin being so popular were its use in pop culture references, memes and good marketing power. At the same time, the mascot of Shiba Inu created a lively community. That community of Dogecoin is still there, but the tokens like Shiba Inu that started as some knockoff coin of Dogecoin has followed the same strategy and significant marketing momentum. 

Dogecoin Might Still Be There To Stay

The good news for the investors of Dogecoin is that the token might not go away as it still holds over 22 billion USD of market capital and constant support by Musk, the tech world celebrity. In the crypto world, Dogecoin is still very much established, so it can be imagined that the coin will continue going up and down according to the broader crypto market. One thing is sure that Musk is already successful in helping Dogecoin be a winner. However, another unbelievable hike from early 2021 might not be possible again. 

So, Should I Invest USD 1000 Right Now In Dogecoin?

Motley Fool Stock Advisor, the online investment service run for about two decades, beat the stock market more than four times. Before investing in Dogecoin, if you have any doubts, know that it is not among the top ten potential stocks to buy for the investors, according to award-winning analysts.