Dogecoin (DOGE-USD) likely has seen its peak and the price of this meme cryptocurrency will continue to slide until the market valuation eventually drops to zero. Dogecoin has no practical use, contrary to other digital currencies, and Stage 4 of the bubble has been reached.

Why Dogecoin is set to die a painful death
Dogecoin, which was created as a “joke” by two developers in 2013, has been on a breathtaking tear this year, rising more than 12,000 percent at some point.
Backers of the cryptocurrency include Elon Musk, founder of Tesla (NASDAQ:TSLA), and Mark Cuban which have propped up the cryptocurrency with frequent tweets in which they showed public support. The biggest bull, by far, is Elon Musk whose tweets regularly influence the Dogecoin price.
But the cryptocurrency with a Shiba Inu dog on its virtual coin likely has seen the peak in its market value which was reached just before Elon Musk’s highly anticipated SNL performance last month.
Likely aware that his public statements create massive volatility spikes, Elon Musk gave a half-hearted endorsement of Dogecoin on SNL and warned of risks, causing the price of Dogecoin to drop 30% instantly. And the price is unlikely to get back to where it was before this event.
Dogecoin’s market valuation peaked at almost $100b just before the show as Dogecoin’s price surged to an all-time high of $.7408… almost reaching the $1 price target for the cryptocurrency that was frantically touted on social media.
Dogecoin’s market valuation is now $47b, about half of what the combined value of all Dogecoins was worth a month ago…
Dogecoin’s market valuation, however, is still larger than the market value of Walgreens (WBA), which has more than 4,000 pharmacies, or Dollar General (DG), which has more than 16,000 stores that sell actual products… yet there are no practical applications for the cryptocurrency which is why Dogecoin is doomed to fall back to $0.
And there are two reasons for that.
Like all meme stocks or meme cryptocurrencies, Dogecoin is a hype and all hypes must die down after the easy money has been made. After a 12,000% return, this seems to be the case.
GameStop (GME) which was hyped on WallStreetBets in January created a 1,200% gain for early investors. AMC Entertainment (AMC), a company that runs a chain of movie theatres, created a 2,200% return year-to-date, in part based on management being clever enough to issue new shares in private placements at exorbitant prices.
Part of every bubble is that insane price targets are put on the table.
The most unrealistic price targets for AMC have been floating around on social media with some Reddit soldiers calling for the stock to go to $100,000… which mirrors the completely baseless and arbitrary $1 price target for Dogecoin.
AMC has 283 million shares in the market… so let’s do some math: $283m shares times $100,000 price target means AMC would have a market value of $28 trillion - that is a trillion not a billion! - which is larger than the total size of the US economy… (the US has a GDP of $23 trillion).These price targets are completely invented and have no connection to reality.
And since Dogecoin rose up to 12,000% this year compared to a 2,200% gain for AMC, the hype around the Shiba Inu dog-coined cryptocurrency is at least five times worse than the AMC hype.
And the second reason why Dogecoin will die a slow and painful death is this one: Dogecoin simply has no practical value and is not a store for value.
Despite Dogecoin making it into the Top 6 cryptocurrencies by market value in 2021, limited usability and the esoteric character of this coin stand in the way of widespread adoption.
While Dogecoin has “joke” and “entertainment” value on social media, it doesn’t have any economic value at all. Bitcoin (BTC-USD) and Ethereum (ETH-USD), the two largest and most respected cryptocurrencies, have value because they are widely adopted digital currencies that support DeFi and they have a lot more legitimacy than Dogecoin, in part because they have been around much longer and supply is limited.
Bitcoin has a 21m BTC supply cap while Ethereum has an annual maximum supply of 18 million ETH. Contrast that to Dogecoin which has an infinite supply which speaks against using Dogecoin as a store for value. What also speaks again using Dogecoin as a store for value is the extreme volatility with daily price movements of 10-20% being very common. If you want to "store value" you wouldn't want to invest in a high-volatility asset!
A case in point is Dogecoin’s listing on Coinbase (COIN) which added the cryptocurrency to its pro-oriented trading platform this month. Dogecoin’s price surged 20% only for excitement to fizzle out quickly and the price to fall back.
Extreme risk and high possibility of total loss of capital
We seem to have entered “Stage 4” of the Dogecoin bubble.
Stage 4 of a bubble typically sees a decline in euphoria which was instrumental in the build-up of excitement. Prices soon fall and do so at accelerating speed. Random volatility spikes create hope for a rebound in the short term, but prices quickly fall again and lower lows are achieved.
Dogecoin peaked at $.74 last month, at the height of euphoria and excitement... and it has been downhill from there. Extreme caution must be exercised here.
A big risk here relates to Elon Musk and other celebrities tweeting about Dogecoin and reigniting the trading frenzy. Elon Musk's tweets have shown to influence Dogecoin's price in both directions and positive tweets could send Dogecoin's price sharply higher again. If more companies announce that they will accept Dogecoin as a means of payment, this could also drive Dogecoin's price higher short term.
Final thoughts
The problem with social media hypes for meme stocks and meme cryptocurrencies like Dogecoin is that they die a quick death and new hypes must be found to keep the ball rolling.
With new pump-and-dump “opportunities” popping up every other day, it is not very appealing to invest into an “asset” that has already risen this much.
Expect Dogecoin to fall towards $0 this year and die a slow death.