Future of Dogecoin: Predictions for the Next Year

oin, the entrepreneur made a pretty obvious tease tying in the cryptocurrency leading up to the election. Namely, Musk took to social media to promote the creation of a new government agency should Trump win. The name of the agency was the Department of Government Efficiency (D.O.G.E.).

My reasoning was that if Trump did win, he would subsequently make an announcement about Musk joining his administration and create D.O.G.E. As such, I figured the price of Dogecoin would rise based on this news. As of now, all of these things have happened — but that doesn’t mean Dogecoin is a wise investment opportunity.

The biggest reason investors should avoid Dogecoin is because it’s a meme coin. As I pointed out, the primary reason Dogecoin’s price has risen as of late all stems from rumors of a new government agency led by Musk and funny memes that have fueled this narrative online. In other words, Musk’s D.O.G.E. has nothing to do with Dogecoin itself. At the end of the day, the price of Dogecoin is completely disconnected from anything tangible.

In the short term, I wouldn’t be surprised to see the price of Dogecoin continue running higher. Between the positive sentiment surrounding D.O.G.E., President-elect Trump’s inauguration inching closer, and the potential for a Santa Claus rally at the end of December, I think there’s a good chance that stocks and crypto see another jolt before the end of the year.

But as always, reality will eventually set in. The idea of D.O.G.E. is interesting — namely, slashing excess costs in the federal budget to reduce the deficit. However, I think Musk and his team will come to find that such an effort is much easier said than done. After all, the incoming Trump administration is not the first to come up with such an idea.

While I’m not saying D.O.G.E. is destined to be a failure, I am positing the notion that reducing the federal deficit will take much longer than most people are probably anticipating. As such, I wouldn’t be surprised to see some of the euphoria surrounding Musk’s ambition begin to fade — and with it, the price of Dogecoin.

In my eyes, Dogecoin is an abnormally risky investment opportunity wrapped inside the already speculative nature of cryptocurrency. I would pass on investing in Dogecoin and allow the internet-driven hype to play out. This time next year, I wouldn’t be surprised if the price of Dogecoin has retreated considerably.