Dogecoin (DOGE -5.98%) was one of the most successful cryptocurrencies last year, as it gained over 250% and hit its highest price since 2021. The meme coin has erased some of those gains in 2025, as it's currently down 45% on the year.
Buying the dip is a popular investing strategy. Dogecoin still has plenty of name recognition, and it's the eighth-largest cryptocurrency by market cap at the time of this writing (June 6), so this may seem like an opportunity to pick it up at a discount. But investors who buy in hopes of a rebound could end up disappointed.
Image source: Getty Images.
What's behind Dogecoin's recent ups and downs?
Taking a closer look at Dogecoin's performance in 2024, we can see that most of its gains occurred toward the end of the year. Specifically, it started rising rapidly on Election Day and peaked on Dec. 9, 2024.
Dogecoin Price data by YCharts
That coincides with the election of President Donald Trump after financial backing from Elon Musk, a longtime fan of Dogecoin. Musk has had a sizable influence on Dogecoin for years. Many of his social media posts about it have caused the price to spike, and Dogecoin reached its all-time high during Musk's 2021 appearance on Saturday Night Live.
Most of Dogecoin's gains last year were likely due to Musk's role in the Trump administration. The news that he would be running the Department of Government Efficiency, or DOGE for short, also brought attention to the cryptocurrency. But the hype has fizzled out since then.
Musk said the U.S. government has no plans to use Dogecoin. The Trump administration has announced a Strategic Bitcoin (BTC -2.24%) Reserve and a U.S. Digital Asset Stockpile, but Dogecoin isn't one of the cryptocurrencies mentioned so far as part of the stockpile. To top it off, Musk's role in the federal government is now over, and he's currently feuding with Trump. The odds of Dogecoin getting another political boost seem slim.
The problems with Dogecoin as an investment
Dogecoin suffers from the same issue as most meme coins. It doesn't serve any purpose other than being amusing. You can send it to other people and use it as a payment method at a limited number of merchants -- 2,096 as of June 2025, according to Cryptwerk. Those aren't standout features in a cryptocurrency. Plenty of cryptos offer faster, cheaper transactions, and some are accepted by more merchants, although no cryptocurrency has become widely adopted as a payment method.
Most of the major cryptocurrencies have some sort of unique benefit or a problem they solve. Ethereum (CRYPTO: ETH) popularized the concept of smart contracts, which are programs built into a blockchain network. Stablecoins aim to peg their value to another asset, such as the U.S. dollar. XRP (CRYPTO: XRP) aims to make cross-border payments faster and more affordable.
Dogecoin doesn't solve any problems or have any special features. Now, you could say the same about Bitcoin, but there's a key difference. Bitcoin has caught on as a store of value because it has a limited maximum supply of 21 million. Dogecoin issues about 5 billion new coins per year and has no maximum supply. At that level of inflation, it won't work as a store of value.
Meme coins sometimes take off despite a lack of utility. But Dogecoin has been around since 2013, making it old in both dog years and crypto years. People look for new meme coins that could explode and turn them into millionaires. With a market cap of over $25 billion already, Dogecoin doesn't exactly fit the bill.
Buying Dogecoin is risky business
Dogecoin's biggest gains have been due to hype and its association with Musk. Buying it in hopes that it catches fire again is much closer to gambling than long-term investing.
A dip in price alone is never a good reason to invest in a stock or cryptocurrency. It can be a buying opportunity if the fundamentals are there, but that's not the case with Dogecoin. There's no reason to expect it will bounce back, and it could sink even lower, considering it doesn't appear to be in the government's plans.
Cryptocurrency has some interesting (and highly volatile) investment opportunities. For the best chances of success, skip the meme coins and stick to projects with a clear purpose and goals.
