Two weeks after the U.S. presidential election, crypto markets are riding a bull run. The sector has achieved a record-breaking market cap of over $3.4 trillion, while bitcoin shattered expectations by soaring past $98,000, according to Coingecko. Amid this enthusiasm, certain coins are outpacing the pack, and Dogecoin (DOGE) is one of the standout performers.
The oldest memecoin has surged an astonishing 150% since Election Day, buoyed by promises from President-elect Donald Trump and the growing political clout of Elon Musk. Indeed, Musk has been a longtime supporter of Dogecoin, calling himself "The Dogefather" and regularly praising the memecoin on X. With the announcement of the Department Of Government Efficiency (D.O.G.E.), a newly created agency Musk co-leads alongside Vivek Ramaswamy, this connection took on new dimensions.
Dogecoin, created as a satire of the cryptocurrency frenzy and social media hype, has long been dismissed by the "serious" crypto finance players as a frivolous fad. Yet, the memecoin evolved to thrive on its hype, now boasting a market cap of $58 billion—on par with some of the world's largest corporations.
This raises a key question: is there untapped value in Dogecoin beyond the hype? Or has it just mastered the art of monetizing the hype? Dogecoin's unique journey challenges conventional notions of value and utility, making it a phenomenon that investors—and skeptics—can no longer ignore.
Dogecoin was born in 2013 as a lighthearted parody of the rapidly growing crypto market. Inspired by the viral meme of a Shiba Inu dog, software engineers Billy Markus and Jackson Palmer created Dogecoin to mock the hype and speculation surrounding it.
Technically, DOGE is the native cryptocurrency of the Dogecoin blockchain, which is a fork of Litecoin, itself a fork of Bitcoin. Like Bitcoin, Dogecoin operates on a Proof-of-Work consensus mechanism. Unlike Bitcoin, it uses the Scrypt hashing algorithm rather than SHA-256. This algorithm is designed to be less reliant on specialized ASIC miners, making it more accessible to general-purpose hardware like CPUs and GPUs. This democratized approach to mining earned Dogecoin the nickname "the people’s currency."
Dogecoin blocks are created roughly every minute. This makes Dogecoin transactions quicker and cheaper than Bitcoin's (33 transactions per second vs. 7). Yet, some argue that this is still too low, especially compared to the Lightning Network's potential of millions of TPS.
In terms of tokenomics, Dogecoin employs a fixed reward system. It awards miners 10,000 DOGE per block, adding roughly 5 billion DOGE to the supply every year. This results in a stable inflation rate that decreases over time as the total supply expands. As of November 2024, Dogecoin’s inflation rate stands at approximately 3.4%, with a circulating supply of around 146 billion DOGE.
Dogecoin can be described as a cheaper, faster, but less secure alternative to Bitcoin. However, unlike Bitcoin-inspired blockchains like Litecoin and Bitcoin Cash, it has not faded into obscurity. Its strength lies in its community, which has driven its success and given it a lasting identity.
The Power Of The Dogecoin Community
The Dogecoin community is famous for its coordinated actions. It uses collective energy for both charitable and disruptive causes. In 2014, Dogecoin enthusiasts raised $30,000 to help fund the Jamaican bobsleigh team’s trip to the Winter Olympics. That same year, they made headlines again by raising $55,000 to sponsor NASCAR driver Josh Wise. Another memorable initiative was the “Doge4Water” campaign, which raised over $30,000 to build clean water wells in Kenya.
On the disruptive side, the Dogecoin community played a notable role in the GameStop short squeezeof 2021. Dogecoin holders joined forces with GameStop retail investors on Reddit and drove up GameStop’s stock price. This triggered a massive short squeeze that caused big financial losses for hedge funds betting against the stock.
The Dogefather
In 2019, tech billionaire Elon Musk began endorsing Dogecoin on social media and TV. Musk’s involvement went beyond tweets and memes. He claimed that Dogecoin could become a viable currency for everyday transactions. Later, Musk’s company Tesla allowed customers to buy select merchandise (though not vehicles) with the memecoin. SpaceX followed suit, announcing the DOGE-1 mission to the Moon, the first space mission funded entirely by Dogecoin.
The “Dogefather era” reached its peak in 2021. Elon Musk’s tweets helped drive Dogecoin's price from $0.01 to an all-time high of $0.65—a staggering 6,400% increase in just five months. Although the coin’s value dropped during the subsequent bear market, it stabilized at a new, higher baseline of $0.07.
Musk’s acquisition of Twitter - the primary social media platform for the crypto space - has further cemented his influence on Dogecoin. Twitter even temporarily changed its logo to the iconic Doge meme in April 2023, triggering a 30% surge in DOGE price.
Elon Musk’s ambitions have since expanded into the political sphere. A vocal supporter of President-elect Donald Trump, Musk has gained significant influence in Washington, D.C. He was also appointed as co-leader of the newly formed agency aptly called D.O.G.E., or Department of Government Efficiency. The Dogecoin price reacted by spiking 150% and reaching $0.42 at the time of writing.
However, Musk’s deep association with Dogecoin has not been without controversy. In 2023, a group of Dogecoin investors filed a lawsuit accusing Musk of manipulating the coin’s price for personal gain. They alleged that his tweets, media appearances, and even Twitter’s logo change were coordinated “public stunts” to profit from insider trading. Reuters reported that the lawsuit ended last week, with the judge ruling that investors "could not prove securities fraud from relying on Musk’s tweets.”
DOGE As A Currency
With good tech, community support, and celebrity endorsements, does Dogecoin have what it takes to become a true currency? This question doesn’t have a straightforward answer. At its core, a currency is not inherently valuable; its worth comes from collective belief in its ability to facilitate exchange and store value. The more people share this belief and use the coin, the closer it gets to being a functional currency.
By this measure, Bitcoin—with 822,000 unique active addresses weekly—has already crossed the threshold of becoming a “real currency.” Dogecoin, however, lags significantly behind, with just 80,000 unique active addresses weekly, according to data from IntoTheBlock. Furthermore, Dogecoin’s heavy reliance on one controversial figure, Elon Musk, presents additional risks. While Musk’s endorsement has boosted Dogecoin’s profile, this reliance on a single, hype-driven personality creates significant uncertainty.
Despite these limitations, Dogecoin is used as a currency. It may not rival Bitcoin as a global currency, but it has already carved out a niche as a community currency. Its future success will depend largely on the ability of its community to reduce its reliance on Musk and move beyond the media-driven buzz. Without this evolution, Dogecoin risks remaining a community memecoin, attracting short-term speculators more than real users.
Dogecoin’s journey has been remarkable. Eleven years after its inception, what began as a satire of social media and crypto hype has harnessed the very power it once mocked to evolve into a legitimate community currency. This challenges the traditional finance perspective that often views hype as irrelevant or unsustainable. The Dogecoin community has redefined it, turning it into a culturally significant phenomenon.
In this sense, Dogecoin is more than a memecoin—it’s a case study. It shows how decentralized communities and cultural movements can influence modern finance. Whether Dogecoin gains wider adoption or stays within its niche, it has already proven the strength of collective belief and action.
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