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Highlights
- When Elon Musk took over micro blogging platform Twitter, there were speculations over DOGE’s use
- The meme token, according to its proponents, can find utility as a reward token, but its use as legal money seems improbable
- DOGE couldn’t regain its all-time high of US$0.7, and the year 2022 has proved bad for all major cryptos
The term cryptocurrency has yet to have any standard definition. The currency part does not make much sense, simply because any cryptocurrency is yet to be widely adopted in the global payments system. Even though Bitcoin has found limited use as legal tender in some jurisdictions, many nations like Australia prefer the term ‘crypto assets’ because of their use in speculative trading.
Even within cryptocurrencies, categories like meme tokens and stablecoins have distinct features. For example, a stablecoin like the USD-pegged Tether (USDT) is generally not used for speculative trading as it is in Bitcoin and Ether (ETH). Dogecoin (DOGE), on the other hand, is a meme token which started as a ‘joke’ with no certainty over its long-term utility. Today, let us explore what DOGE’s long-term utility could be.
Use as a reward token
Loyalty reward points that signify some value in fiat currency have been used in industries like credit cards, air tickets, and hotel booking. The holder can redeem these points for future transactions; however, they do not have any independent value as a medium of exchange or money. Dogecoin’s proponents say the cryptocurrency could serve as a reward token on platforms like Twitter and Reddit. However, this also means that the utility would be confined to only a particular platform.
When Elon Musk, a well-known cryptocurrency enthusiast, took over Twitter, there were murmurs that Dogecoin could soon be accepted as the platform’s in-house reward token. This has yet to materialise, and Musk is preoccupied with things like verification badges and cost-cutting measures. The value of Dogecoin also surged following Musk’s Twitter deal, but the rally fizzled out soon.
Data provided by CoinMarketCap.com
Dogecoin’s highest price
In May 2021, DOGE reached its highest price at nearly US$0.7, but similar to other cryptos like Bitcoin, its value has remained volatile. Nearly a year after the all-time high, DOGE is trading at under US$0.1, which shows how unpredictable crypto prices can be. This year has been particularly dull for cryptos, with Bitcoin losing more than half its value. Many experts doubt any real utility of cryptocurrencies because of instability in their prices.
Bottom line
DOGE is one of the earliest meme coins within the cryptoverse. Meme tokens do not suggest any specific use case; they begin only as speculative assets. Musk once hinted that he was working with DOGE developers to make the cryptocurrency more efficient, but no further details have been provided. The utility of DOGE as a reward token in Twitter or any other ecosystem is only a subject of speculation.
Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.
