Dogecoin (CCC:DOGE-USD), the ninth-largest crypto token with a $35.5 billion market value as of Nov. 10, has kept its value at this level for quite some time. In the past six-plus months, DOGE has maintained an average price of around 26 cents per token.
For example, on April 22, Dogecoin was at 26.1 cents per token. As of mid-day Nov. 10, it was trading at 26.88 cents. It has maintained this high level of market valuation for quite some time.
At the beginning of this year, Dogecoin was priced at a little more than half of a cent ($0.005685). That means so far this year, it has climbed 47 times its price at the end of 2020.
But since mid-April, DOGE has been more or less flat, even though it peaked at 73.76 cents on May 8 and later dropped to a trough of 17.36 cents on July 19.
DOGE has seen some basic level of popularity in the crypto investing universe. Granted, as I have talked about in earlier articles, Dogecoin has a limited use case. Its function as a blockchain utility is mainly as a form of payment.
For example, AMC Entertainment (NYSE:AMC) recently included Dogecoin in its list of cryptos with which users can purchase online gift cards. CEO Adam Aron used Twitter (NYSE:TWTR) to make the announcement indicating Dogecoin was an acceptable form of payment.
Additionally, Mark Cuban and the Dallas Mavericks recently accepted Dogecoin as a payment mechanism. In fact, Cuban indicated the team had received 112,000 DOGE tokens as of April. It was the first National Basketball Association (NBA) team to accept DOGE to purchase tickets and merchandise.
In fact, leaning into this medium of exchange concept, Mark Cuban told CNBC in August that he likes Dogecoin. He told the publication, “the community for doge is the strongest when it comes to using it as a medium of exchange.”
The Dogecoin Halo Effect
Don’t forget about Elon Musk. He has long backed DOGE, as I have written about previously. But recently, speculation has arisen that Tesla (NASDAQ:TSLA), the electric vehicle (EV) company he runs, might accept Dogecoin as a payment option.
In fact, CNBC recently reported that Elon Musk personally owns Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD) and Dogecoin. The richest person in the world naming Dogecoin alongside the two largest cryptos in the market is quite a stamp of approval.
Alternatively, you might think of it as a sort of “halo” effect for DOGE. The crypto attracts multitudes of young investors, millennials and Gen-Z crypto enthusiasts. That is the sort of advertising you simply cannot buy.
Where This Leaves DOGE Crypto
But that is still not the same as saying the cryptocurrency has had a drop in its popularity. Over time, if the Dogecoin price stays stable at this level, its appeal as a means of payment will rise.
That is what is necessary for a reserve currency. Customers of goods and services need to have confidence that their money will not drop in value over time. Otherwise, no one would accept it as a means of payment. They would not want to have a deteriorating currency, like in Brazil or Turkey, for example.
Moreover, as DOGE gains acceptance over time, its value will slowly increase due to its popularity and appeal. I suspect that is what is happening now with Dogecoin, especially given the huge personalities that seem to give it a “halo” effect.