As it remains far below its all-time highs, what’s next for Dogecoin (CCC:DOGE-USD)?
Sure, it’s utility may pale in comparison compared to other altcoins, such as Ethereum (CCC:ETH-USD), and the scores of up-and-coming names competing to supplant it in the world of DeFi (decentralized finance).
But, it has potential. With its billionaire booster Elon Musk helping to fast-track upgrades, this coin has a path to move beyond its “memecoin” roots, and become something more than a speculative vehicle.
With these prospects, chances are it’ll hold steady at or near today’s prices.
Yet, is there a path for it to rally to $1 per coin? Or, a full rebound back to its past highs (around 74 cents per coin)? Not so fast.
Upgrades may be in motion, but upgrades that help turn it into anything close to an “Ethereum killer” remain years in the making. In the meantime, high-utility altcoins could continue leveling up.
With this in mind, they remain your better option, when it comes to the potential for gains. Continue focusing on those, and stay on the sideways when it comes to this one.
Why Dogecoin May Not Be Set to Collapse
Its biggest skeptics may believe that, once the hype fades, Dogecoin will fall back to sub-penny prices. This makes sense, given it has been speculation driving its rise so far this year.
In a recent interview, Fridman discussed how, with someone leading the way, Dogecoin could become an “interesting cryptocurrency.” That is, one with higher utility.
By doing so, Hoskinson believes it would finally have a “value floor,” which would prevent its collapse. Right now, the person leading the way is Elon Musk, but will he follow through?
So far, he has, as seen from initiatives such as a proposed upgrade that reduces transaction fees. However, Hoskinson says it’ll take 2-3 years to fully improve this “memecoin.”
A lot could happen between now and then. The DeFi trend could fizzle out. DeFi could continue to disrupt the world of finance, but Ethereum and its rivals continue to “level up,” leaving Dogecoin still far behind in terms of utility.
Musk could even put this on the back burner, shifting focus to his many other interests.
The specter of its development may help it avoid further losses. but it’s questionable whether this will spark another epic run in its coin price.
Instead, the altcoins “leveling up” today (rather than down the road) appear to be the stronger plays.
The “Ethereum Killers” Are Better Opportunities
If you’re looking at Dogecoin today, chances are you aren’t looking at it as a long-term “buy and hold” position. Instead, you are interested in its prospects of bouncing back to its highs. Or, perhaps finally surging above the $1 mark.
Yet, the best altcoin plays in today’s market may be one of the top “Ethereum killers” currently out there. I’m talking about names like Cardano and Solana (CCC:SOL-USD).
These, and many others, are not only much more sophisticated cryptocurrencies than this one. They all have upgrades in the pipeline that will make them even more advanced mediums of exchange for blockchain transactions.
Cardano will soon have smart contract capabilities. As it invests the proceeds from its recent capital raise into its development, Solana could greatly increase its already-fast transaction speed, allowing it to grab a larger share of this space.
With these developments happening much sooner than the possible upgrades to Dogecoin, they may stand to recover, and hit new highs, much sooner.
Admittedly, future upwards price movement hinges on a full return of investor enthusiasm to this space. As it stands now, the entire crypto market seems to be at a crossroads.
Either last month’s meltdown was a temporary blip. Or, the beginning of the end to the 2021 crypto bubble, to be followed by several years of poor performance, similar to what played out from 2018, till the start of the latest boom late last year.
Bottom Line: Other Altcoins Still Make for Better Plays
Based on Hoskinson’s remarks and Musk’s efforts, there is a path for the “meme coin” to join the ranks of “Ethereum killers” like Cardano.
The path is likely a long one. This coin may not break free from its tongue-in-cheek past for at least several years.
With the higher utility altcoins showing greater near-term rebound potential, consider these still better plays for Dogecoin. It may hold steady, but there’s little to indicate it’s set to hit its past highs, or even $1, anytime soon.
On the date of publication, Thomas Niel held a long position in Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.