Like other cryptocurrencies on the market, Meme coins have performed relatively well since the beginning of the year. But at the top of the chain is Dogecoin [DOGE], with holders making a profit of 55.17% as of December 2, according to IntoTheBlock.
One of the reasons these holders are profiting is DOGE's historical performance, especially its performance during the 2021 bull market. Historically, Meme coin performance has increased by 65,393%.
Whether short or long, DOGE is the way to go
This year, DOGE is up 21.60%. By comparing these two figures, we can assume that holding DOGE is better than trading it for short-term gains.
HODL is an abbreviation for "Hold On Dear Life." This is a phenomenon of holding on to cryptocurrencies for the long term regardless of price fluctuations.
Compared with the performance of other emoticons, the performance of Dogecoin is one step ahead. However, only the frog-themed Pepe's [PEPE] value performed better, up 529% year-to-date (YTD).
This is largely due to its parabolic run at launch. Shiba Inu [SHIB] price increased by just 4.87%, while Floki [FLOKI] increased by 12.25%.
Another reason why DOGE outperformed FLOKI and SHIB may have to do with the repetition of their usual "Uptober" performances.
Although Dogecoin had a slow start to the month, it ended up strong in October, posting double-digit gains. Crypto analysis tool Santiment also played an important role in AMBCrypto’s assessment of the token’s current status and potential.
As of this writing, Dogecoin’s market capitalization has risen to $12.09 billion. That's a massive $4 billion increase from its value around October 19.
The closest meme to DOGE is the Shiba Inu. But as of press time, SHIB has a market capitalization of $5 billion, twice that of Dogecoin.
FLOKI, on the other hand, fails to achieve a market cap of $1 billion.
DOGE is undervalued, follow Bitcoin
However, Dogecoin’s market capitalization growth means it may be less volatile than other coins. That doesn’t mean the coin isn’t undervalued, but it doesn’t have the potential to grow exponentially either.
A look at the 180-day Market Value to Realized Value (MVRV) ratio shows that the metric is -99.98%. This means that the upper limit achieved exceeds the market value.
Therefore, DOGE should be attractive to investors looking for a long-term hold, in which case the token may be considered undervalued.
If Dogecoin follows its past pattern, buyers who have accumulated around $0.08 may be able to make significant gains by holding on to the coin for months or years. Dogecoin’s potential to repeat its past performance may also be relevant to Bitcoin [BTC].
With the 2024 Bitcoin halving on the horizon and the potential approval of an ETF, market participants are optimistic that Bitcoin value will increase or exceed its previous all-time high (ATH).
DOGE also has the opportunity to move in the same direction as BTC. This is because of the meme's association with King Coins. According to data from Macroaxis, Dogecoin has a correlation coefficient of 0.91 with Bitcoin.
With little to no divergence, the correlation coefficient means that DOGE will follow BTC’s movements most of the time.
Considering the 90-day trading period, anyone who purchased DOGE three months ago would have received a 34.59% return on investment.
Bitcoin is showing a similar trend, with its 90-day performance up 51.95%. But DOGE is a more volatile coin than BTC. As a result, its price tends to fluctuate more.
Dogecoin Community Wants Competition
Another factor that supports Dogecoin being a better long-term investment than other memes is the use case. DOGE was created as a joke when it was launched, similar to Bitcoin.
But recently, the meme community has found a way to imbue blockchain with practicality.
Interestingly, the use case is again consistent with Bitcoin ordinal. Known as Doginals, the Dogecoin blockchain now offers users the ability to inscribe text, images, and other content on “shibes.”
Shibes are the smallest unit of Dogecoin. Therefore, the addition of these crypto-assets can serve as a way for participants to store information on the blockchain.
At different times, Dogecoin trading volume has surged due to an increase in dog activity. Therefore, the experiment has the potential to attract more DOGE holders.
More DOGE holders means better network growth for the project, which could support price increases if network growth increases.
However, that doesn't mean other memes don't have use cases. For example, Shiba Inu has Shibarium, its L2 built for faster and cheaper transactions.
The problem with Shibarium however is that it doesn't make SHIB's price any better.
FLOKI also enhances its competitiveness by providing lending and staking services. While all of these memes have the potential to rise at the start of a bull market, most of them don't appear to have the ability to replicate DOGE's 2021 performance.
Dogecoin may not repeat this pattern either. But it will likely regain its status as the most valuable meme in the market.
