- Dogecoin’s strong correlation with Bitcoin makes it a strong candidate to outperform other meme coins.
- The coin may be undervalued, as shown by the MVRV ratio.
Meme coins, like other cryptocurrencies in the market, have had a relatively good show since the year began. But on the top of the chain is Dogecoin [DOGE], which had 55.17% holders in profit on the 2nd of December, according to IntoTheBlock.
DOGE stands out in the memecoin space as the asset with the highest proportion of holders in profit, with approximately 55.17%.
More Memecoin Insights: https://t.co/n29ohjsRRM pic.twitter.com/GHyvIb5uHy
— IntoTheBlock (@intotheblock) December 2, 2023
One reason for having these holders in profit was because of DOGE’s all-time performance, especially its run during the 2021 bull run. On an all-time basis, the meme coin’s performance showed a 65,393% increase.
Whether short or long, DOGE is king
This year, DOGE saw an increase of 21.60%. By comparing both data, one can assume that it is better to HODL DOGE than to trade it for short-term gains.
HODL is an acronym for Hold On to Dear Life. It is a phenomenon that involves keeping a cryptocurrency for the long term irrespective of price swings.
When compared with the performance of other memes, Dogecoin’s performance was one step ahead. However, only frog-themed Pepe’s [PEPE] value has much better performance, increasing by 529% on a Year-To-Date (YTD) basis.
This is to a great extent because of the parabolic run it had when it launched. Shiba Inu [SHIB] price only jumped by 4.87% while Floki [FLOKI] increased by 12.25%.
Another reason DOGE has outpaced both FLOKI and SHIB could be linked to the repeat of its usual “Uptober” performance.
Though Dogecoin had a slow start to the month, it eventually found this October strong with a double-digit hike. Crypto analysis tool Santiment was also instrumental in AMBCrypto’s evaluation of the coin’s current condition and potential.
At the time of writing, Dogecoin’s market cap had risen to $12.09 billion. This was a substantial $4 billion addition from the value around the 19th of October.
Source: Santiment
The closest meme that came close to DOGE was Shiba Inu. But SHIB’s market cap at press time was two times less than that of Dogecoin, at $5 billion.
FLOKI, on the other hand, could not boast of a billion-dollar market cap.
DOGE undervalued, tags along Bitcoin
However, Dogecoin’s market cap growth means it could be less volatile than the others. But that does not imply that the coin was not undervalued, but neither does it have the potential to increase exponentially.
A look at the 180-day Market Value to Realized Value (MVRV) ratio showed that the metric was -99.98%. This means that the realized cap is outpacing the market value.
So, DOGE should be appealing to investors looking to HODL as the coin could be termed undervalued in this state.
Source: Santiment
Should Dogecoin follow its past paradigm, buyers who accumulate around $0.08 may make significant gains from holding the coin for a few months or years. Dogecoin’s potential to repeat its past performance could also be linked to Bitcoin [BTC].
With the Bitcoin halving coming up in 2024, alongside a potential ETF approval, market participants are optimistic that the coin value would increase or surpass its previous All-Time High (ATH).
DOGE also has the chance to head in the same direction as BTC. This is because of the correlation the meme has with the king coin. According to Macroaxis, Dogecoin has a 0.91 correlation coefficient with Bitcoin.
With almost no divergence, the correlation coefficient implies that DOGE, most times, follows BTC’s movement.
Taking the 90-day trading horizon into context, anyone who may have bought DOGE three months ago would be up 34.59% on the investment.
Source: Macroaxis
This was a similar trend exhibited by Bitcoin, whose 90-day performance was a 51.95% increase. But DOGE is a more volatile coin than BTC. So, it tends to have more price fluctuations.
The Dogecoin community wants to compete
Another factor supporting Dogecoin being a better long-term investment than other memes is the use case. At launch, DOGE was only created as a joke, similar to Bitcoin.
But in recent times, the meme community has found a way to make the blockchain full of utility.
The interesting part is that the use case was again in line with Bitcoin Ordinals. Called Doginals, the Dogecoin blockchain now offers users the ability to inscribe texts, images, and other things on “shibes.”
Shibes is the smallest unit of Dogecoin. So, the addition of these crypto assets serves as a way for participants to store information on the blockchain.
At different times, transaction volume on Dogecoin skyrocketed because of the rise in Doginals’ activity. Therefore, there is a chance that the experiment could bring in more DOGE holders.
More DOGE holders mean better network growth for the project, and if the network growth increases, it could back a price uptick.
However, this does not mean that other memes are void of use cases. For example, Shiba Inu has Shibarium, its L2 built for making faster and cheaper transactions.
However, the problem with Shibarium is that it has not influenced SHIB’s price to be better.
Realistic or not, here’s SHIB’s market cap in DOGE terms
FLOKI has also upped its game by providing lending and staking services. While all of these memes have the potential to rise when the bull market begins, most of them seem not to have the capacity to replicate DOGE’s 2021 performance.
Dogecoin may also not repeat that pattern. But it would most likely regain its spot as the meme with the highest market value.