Is it dangerous to buy now?...The truth about Dogecoin warned by experts

▲ Dogecoin(DOGE) ©

Skepticism is spreading about whether Dogecoin (DOGE) is still an attractive investment, with analysis suggesting it will be difficult for it to transcend its limitations as a mere 'meme coin'.

According to the investment media outlet The Motley Fool on April 18 (local time), Dogecoin has fallen by approximately 86% from its peak in May 2021, revealing a structural limitation where its price movement is heavily influenced by market sentiment and celebrity remarks rather than fundamentals.

Currently, Dogecoin's development ecosystem is very limited. There are only about 17 full-time developers, and more than 86 blockchain projects have larger developer communities. This is interpreted as a negative sign for long-term growth, as it makes it difficult to introduce new features or expand use cases.

Price increases also appear to rely on 'hype' rather than structural foundations. In the past, patterns of rapid surges following remarks by celebrities such as Elon Musk have been repeated, but most of these increases have been short-lived and have not led to sustained upward trends. The inability to maintain gains in recent years also supports this characteristic.

The future competitive environment is also a burden. As the cryptocurrency market matures, projects with strong technology and real-world use cases are more likely to attract investment capital, and interest in Dogecoin may gradually weaken. Indeed, its price has fallen by about 75% over the past five years, confirming a weakening position in the market.

In particular, structural differences are even more pronounced when compared to Bitcoin (BTC). Bitcoin has a limited supply, whereas Dogecoin's structure involves the issuance of approximately 5 billion additional coins each year, resulting in lower scarcity. There are also significant gaps in terms of liquidity and institutional integration. Considering these points, a cautious approach is necessary from a long-term investment perspective.

*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*