What Has To Happen For Dogecoin To Hit $1?

Since the news of Donald Trump's election victory, the stock market has experienced a significant boon. This is largely due to Trump's campaign promises including increased deregulation and lower corporate tax rates, which will both help corporations increase their earnings (and their eventual payouts). Alongside more traditional investments, cryptocurrencies have also been experiencing record highs (largely helped by the Federal Reserve's second interest rate cut). For those who might not have delved into the world of cryptocurrencies just yet, there are a few important things to know. For starters, crypto is essentially a peer-to-peer digital payment system that allows users to send and receive payments without the use of banks to verify transactions (this also makes crypto more susceptible to potential scams). Since these transactions exist only digitally, there's no physical money attached to it, only digital currency in digital wallets.

While certain cryptocurrencies like bitcoin and ethereum maintain high levels of trade and value, others historically have been taken less seriously. Perhaps the least serious form of cryptocurrency out there is dogecoin, which was originally created as a meme currency (based on the famous doge meme) meant to mock other forms of crypto. However, the currency has since become a popular choice in the cryptocurrency world, reaching its peak price of 74 cents in May 2021. However, in the wake of President-elect Trump's election victory, DOGE has experienced a 242.63% increase in value (in the 30 days ending on November 14, 2024), leaving some to wonder if dogecoin could finally hit $1.

If you're wondering why dogecoin has specifically experienced renewed popularity, it's important to understand the connection the currency has to President-elect Donald Trump's still-being-announced cabinet. More specifically, to Trump's announcement that Tesla CEO Elon Musk would have a prominent role in the new administration. Musk is set to head (alongside billionaire and former candidate Vivek Ramaswamy) a brand-new government agency, which will be known as the Department of Government Efficiency, or DOGE. This, alongside Musk's continued support and public adoration for dogecoin has sent the currency into overdrive. According to CoinMarketCap, as of November 14, 2024, dogecoin was selling for about 39 cents with a market cap of $57.21 billion. In comparison, as of the morning of election day, November 5, dogecoin was selling for just 17 cents.

According to Bitcoinist.com, two specific factors would have to happen in order to get dogecoin over the $1 hump. First, a growing acceptance of the currency as a payment tool is vital to the future of the cryptocurrency's broader use. This could come as a result of more businesses accepting dogecoin as currency or even through the increased influence of Musk himself, who could choose to incorporate the currency into his social media platform, X. This broader use would ultimately drive up the value of dogecoin (which would need to hit a market value of about $144 billion to reach $1). The second factor would be an increase in usability and safety on the backend of dogecoin to make it more compatible with existing payment methods.

Dogecoin isn't alone in its recent gains. According to data from CoinMarketCap, other popular forms of cryptocurrency have experienced significant increase. Bitcoin (BTC) has increased 33.80% in the last 30 days (as of November 14), while ethereum (ETH) prices have risen 20.99% in the same time period. However, it's important to realize that not only are cryptocurrencies extremely volatile and unpredictable but that these current surges are due to the anticipated unpredictably of Donald Trump's second term as president. According to the Crypto Fear & Greed Index, the current market sentiment is in extreme greed, meaning the market is due for a correction, which could have serious financial consequences for crypto investors.

CNN's Fear & Greed Index (the original one in which the crypto one was based) currently places general market sentiment in the greed category. While greed in the market is typically associated with a bull market, it's worth noting that these bull markets can be short-lived. Similarly, as companies and investors attempt to jockey ahead of Trump's second term, the reality of his economic policies could prove problematic. While corporations might be excited for deregulation, the implementation of other policies, like Trump's proposed tariffs (we broke down what tariffs are and who pays for them) could lead to significant increases in consumer goods, which could negatively impact the overall market. While profitability and cryptocurrency values might be artificially inflated now out of excitement for the potential policies of a second Trump term, a lot can economically change in 2025.