This year has been a positive one for the overall cryptocurrency market. The industry's value, now at about $2.2 trillion, has climbed 29% since the start of 2024. However, that favorable backdrop hasn't benefited all digital assets like you might imagine.

Just look at Dogecoin (DOGE 2.58%). It's up an unremarkable 20% on the year, underperforming the market. As of this writing, this speculative cryptocurrency trades at about 85% off its all-time high, a milestone that was achieved in May 2021.

But the bulls have their sights on a lofty target. Can Dogecoin soar roughly nine-fold to reach $1 one day?

Unpredictable hype cycles

The market went for meme stocks in a big way in the spring of 2021. This excitement trickled over to the cryptocurrency market as well. In May of that year was when Dogecoin hit its peak price, thanks to bullish support of the dog-themed token.

But that positive sentiment can quickly turn on a dime, and this is precisely what happened. This isn't a surprise when you understand that investor behavior toward something like Dogecoin is driven more by speculation than by anything related to the fundamentals.

In the past, Dogecoin has also experienced positive momentum as well-known supporters, like Elon Musk and Mark Cuban, have publicly mentioned the crypto. Some people are still hoping that Tesla founder and Chief Executive Officer Musk, who also owns X (formerly called Twitter), will integrate Dogecoin as a payment mechanism on the social media site.

Dogecoin's boom-and-bust cycle even continued into this year. The crypto was up a whopping 144% from the start of 2024 to April 1. However, it has tanked more than 50% since then. It's not hard to see that Dogecoin will continue to have these wild price swings. These movements are unpredictable, which makes owning this token something that's not for the faint of heart.

Easy to be skeptical

Dogecoin's all-time high price was just under $0.74. For it to rise more than 800% from today's price of about $0.11 to the psychologically important $1 mark, the crypto would require significantly higher demand from the investment community. In other words, there need to be more people who want to own it in their portfolios. I'm not optimistic about this happening, ever.

Dogecoin's entire purpose is to be a lighthearted alternative to Bitcoin. Consequently, Dogecoin is little more than a rarely used payment network. It also operates an energy intensive proof-of-work consensus system to approve and process transactions.

However, Bitcoin is far superior. This has a lot to do with the fact that it's decentralized and has a focus on security. Plus, there is a fixed supply cap of 21 million bitcoins. These attractive properties make it a compelling asset to own as a store of value, which is why Bitcoin often gets compared to gold.

On the other hand, there are currently 146 billion Dogecoin tokens in circulation, a giant sum. To make matters worse, 10,000 new tokens are created every single minute, and there is no limit to how high that figure can go. This unfavorable setup shows just how difficult it would be for the price to rise meaningfully, as demand growth would need to outstrip a constantly expanding supply base.

It's hard to be optimistic about Dogecoin's long-term prospects. It has virtually no advantages versus Bitcoin. It's not being used as a popular method of payment. It also doesn't have a large number of developers working on advancing its capabilities.

Investors who want to add crypto exposure to their portfolios should avoid Dogecoin and instead consider Bitcoin. There are also growth tech stocks for those who are more risk-averse.

I think there's no chance that Dogecoin will ever get to $1 per token. In fact, there's a higher likelihood it will become worthless one day.