With the overall market experiencing a slowdown, many meme-based cryptocurrencies have witnessed declines below crucial levels. Dogecoin [DOGE], however, stands out as one of the exceptions holding its ground, although it is perilously close to a 4% drop.
Nonetheless, the strong support around $0.30 might indicate a potential recovery. During 2021, DOGE saw an impressive surge of over 1000%, reaching $0.73 within just 100 days, marking a remarkable performance in the first quarter.
Is Dogecoin gearing up for a comeback that could propel it to new heights in the current quarter?
The Evolution Over Four Years
The cryptocurrency market has undergone substantial changes from 2021 to 2025. The market capitalization has soared to $3.5 trillion, with the number of digital currencies surging from 4,015 in 2021 to over 10,000, representing a staggering 150% increase.
Despite the escalating competition, wallets holding 1 billion or more DOGE have grown by 20%, currently possessing 74.07 billion coins. Open Interest (OI) has also surged fivefold, surpassing $1 billion in May 2021, aligning with DOGE’s bullish trend.
DOGE has evidently experienced significant growth, with robust activity in both spot and futures trading. However, it still remains 52% below its peak value, making the $1 target appear distant.
One key reason for this is its inflationary model. Presently, there are approximately 148 billion DOGE coins in circulation, distinguishing it from Bitcoin’s limited supply. Dogecoin’s unlimited issuance results in the constant devaluation of each coin, fueling the need for substantial growth to reach previous highs.
To replicate the 2021 surge and reach $3.85, DOGE would necessitate a market capitalization of $560 billion—an enormous leap. Achieving this would demand a massive surge in demand to absorb the continuous influx of newly minted coins.
Examining DOGE’s Tokenomics
For perspective, at the current price of $0.35, DOGE’s market cap would stand at around $45 billion if the circulating supply had not expanded over the past four years.
However, with billions of new coins entering the market annually due to its inflationary mechanism, Dogecoin’s market cap has increased to $52 billion—a 15% rise.
This underscores a crucial point: For a meme coin like DOGE, the market cap alone may not present the complete picture. The key determinant lies in the level of demand.
Whether Dogecoin can reclaim its previous peaks or replicate the bullish performance witnessed in Q1 four years ago hinges on the capacity of demand to counter the challenges posed by its inflationary protocol.
Accumulation, particularly by major investors, will play a pivotal role. Interestingly, while significant holders continue to accumulate, wallets holding 10 million to 1 billion DOGE have shed 18% of their positions in the last two months.
In essence, the concentration of DOGE holdings in fewer hands elevates its speculative nature, reducing the likelihood of a Dogecoin ETF in the near future.
Considering these factors, the prospect of a 1000%+ surge to $3.85 appears somewhat uncertain.