Dogecoin is highly affordable and is also extremely popular among newbie investors. But have you ever wondered why the price is so cheap? Read the article to know more.
Although Dogecoin has been breaking several records, the value of each coin is still really affordable.
But of course, it does not mean that the value of Dogecoin is less or it is not an investment material Doge has a market cap of $80 billion and is one of the largest crypto communities online.
Do understand that if the price of the coin is low, it always does not mean low valuation. To compare with the Doge, the IOTA coin which has a price of around $1.3 has a market cap of only around $3.5 billion.
This is also because there are fewer coins of IOTA in circulation compared to Doge. It is quite baffling to many investors that despite the success and growth of Doge, the price has remained relatively less.
But some experts do believe that the prices of Doge will rise again in the future. But not many believe the fact that it will touch Bitcoin price levels which makes it unaffordable to buy one coin, for many.
The Price History of Dogecoin
Dogecoin came into existence in December 2013, and towards the end of that year, the price of each coin was just $0.00026. The price of Dogecoin was considerably low for the first three years and then it began to rise exponentially. This was at the time when cryptos started to virally spread around the world, and people were interested in this financial instrument.
Even recently, the price of Doge was almost constant throughout 2019 and 2020. There was very little talk about Doge and cryptos in general as the Coronavirus Pandemic had started to take up the world. But it was in 2021, when Doge, specifically, became viral. In February 2021, the price of Doge reached the then all-time high of $0.08 and then remained stable for some time before again spiking. That same year in around April, the price of Doge increased to $0.335. The price again dropped for a bit before touching $0.74 somewhere around May. At the time of writing, the price of Doge is $0.2616 (November 2021).
This might look like a small growth in terms of cost, but the percentage leap is immense. This makes Dogecoin one of the most valuable cryptocurrencies and a useful asset to trade and invest in.
Reasons For Dogecoin Being Cheap
Doegcoin price is cheap because Dogecoin has unlimited supply, the total number of dogecoin are unlimited. There are about 10,000 coins added to the network daily by Dogecoin miners.To put it into numbers, there are around 130 billion Dogecoins currently in circulation, and about 5 billion Dogecoins are added every year.
There are a few reasons due to which the price of Dogecoin has historically remained cheap. To begin with, inflation is the main reason. Unlike Bitcoin and some other cryptocurrencies, Dogecoin has an unlimited supply.
There are about 10,000 coins added to the network daily by Dogecoin miners. Due to this, there is an insane amount of Dogecoins already in circulation.
Coming to the basics of supply and demand, when the supply is too much and the demand is not much to equate it, the value of the commodity reduces.
On the contrary, Bitcoin has a limited supply cap of 21 million and it is expected that this will be reached by 2140. With low supply and high demand, the price of Bitcoin has always remained high and experts predict it will go higher.
Even when we compare the market cap, Bitcoin’s cap is already $1 trillion, although it has only 18.5 million coins in circulation as opposed to Dogecoin 130 billion.
For Dogecoin to surpass the market cap of Bitcoin, its value has to increase to around $15 – $20 per coin by next year, which is extremely unlikely given the huge supply.
The reason is simple – oversupply and demand that is not catching up to it. But note that although Doge is popular, investing in any cryptocurrency does not mean guaranteed profits immediately.
But the future price predictions of Doge are optimistic and people believe it will touch $10 by the end of this decade. The more commercial and retail investors Dogecoin attracts, the higher will be its gain in value.