Should You Consider Purchasing Dogecoin While Its Price Remains Below $1?

Bitcoin often grabs the spotlight as the most established and valuable cryptocurrency. Yet, it's surprising to realize that Dogecoin ( DOGE 9.06%), which made its debut in 2013, also boasts a lengthy presence in the crypto world. This canine-themed blockchain network has experienced a turbulent path, but still commands a market capitalization exceeding $36 billion (as of Sept. 9).

By Sept. 9, this meme coin was trading at a 67% discount from its all-time high set in 2021. Its current price sits at $0.24. Should you consider adding Dogecoin to your portfolio while it remains below $1?

Remarkable gains in previous years

Although Dogecoin currently trades well below its peak, it has delivered tremendous returns in the past. Over the last five years, its value has skyrocketed by an incredible 8,250%. If you had put $10,000 into Dogecoin in September 2020, your investment would now be an astonishing $835,000. Dogecoin tends to thrive when investors are highly optimistic and willing to take greater risks.

The token's short-term price swings are largely driven by changes in its popularity. High-profile endorsements from influential individuals, such as Tesla CEO Elon Musk, can cause the price to surge rapidly. Dogecoin’s vibrant fan base also helps keep it in the public eye. Nevertheless, it remains a highly volatile digital currency.

Dogecoin's core shortcomings

Some investors have managed to make significant profits quickly by speculating on different cryptocurrencies and benefiting from dramatic price increases. Those who bought Dogecoin early probably know this firsthand. The lure of huge returns can make Dogecoin appear to be a smart investment, especially now that its price is well under $1.

However, purchasing this token is a major error. Dogecoin is missing any significant underlying strengths. This casts doubt on its potential for lasting success.

For example, its developer engagement is minimal. According to Electric Capital, a venture fund , Dogecoin does not rank among the top 100 cryptocurrencies in terms of developer participation. With few contributors working to enhance Dogecoin’s features or make important upgrades, it’s hard to drive greater adoption, causing it to lag behind competitors.

Dogecoin was originally created as a parody of Bitcoin. Reaching a $36 billion market cap is impressive. Still, this represents less than 2% of Bitcoin's value, and that proportion is likely to shrink over time.

Dogecoin's supply dilemma

When comparing its ability to maintain value, Dogecoin falls short of Bitcoin, which has a fixed maximum supply and is both decentralized and highly secure. There are currently 151 billion DOGE in existence, and this figure grows by 5 billion annually. For the price to rise , demand must consistently outpace a rapidly expanding token supply—an ongoing challenge.

Speculators seeking quick profits also have plenty of other options today, as the market is flooded with countless meme tokens. These alternatives can divert attention and capital from Dogecoin, which could eventually make it less relevant.

Looking ahead five or 10 years, there’s a real chance that Dogecoin could be worth less than it is now. The market may come to recognize that the coin offers no substantial practical value. Still, Dogecoin is likely to retain a loyal community of fans.

The token is currently priced at $0.24. Even though it has dropped significantly, investors would be wise to stay away.