Dogecoin (DOGE) Pros and Cons: Does the Meme Coin Still Have Millionaire-Maker Potential?

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Dogecoin (CRYPTO: DOGE) started 2023 with a bang. After rallying 1,400% in 2022, the meme coin continued to rally another 60% in the first two weeks of January. But the gains quickly fizzled out, and DOGE has now fallen 35% from its recent peak.

Despite the pullback, Dogecoin is still up an impressive 1,100% over the past year. And some investors are wondering if the cryptocurrency still has the potential to make millionaires.

Here's a closer look at Dogecoin's pros and cons to help you decide.

1. The original meme coin

Dogecoin was launched in 2013 as a joke cryptocurrency. But the joke quickly turned into a real phenomenon, as Dogecoin surged in popularity and value.

At one point, Dogecoin was even the fifth-largest cryptocurrency in the world by market capitalization. And it has remained in the top 20 for most of the past year.

Dogecoin's massive gains have made early investors a lot of money. And some people believe that the cryptocurrency still has the potential to make millionaires.

But it's important to remember that past performance is not a guarantee of future results. And Dogecoin is a highly volatile asset, which means that it could quickly lose value.

2. Dogecoin has its blockchain

Unlike most other meme coins, Dogecoin is built on its blockchain network. This gives Dogecoin more flexibility and control over its destiny.

For example, Dogecoin developers can more easily implement upgrades and changes to the network. And they are not subject to the limitations of a third-party blockchain platform.

3. The Elon Musk effect

Dogecoin's biggest advantage may be its high-profile backers, such as Tesla (NASDAQ:TSLA) CEO Elon Musk.

Musk is the richest man in the world and the most followed person on X (formerly Twitter), with over 216 million followers at the time of writing. And he has used his influence to promote Dogecoin on several occasions.

In 2021, Musk even called Dogecoin the "people's crypto" and said that he would continue to support it. And earlier this year, he hinted that Tesla might start accepting Dogecoin for car purchases.

Musk's support has helped to keep Dogecoin in the public consciousness and prevent it from being forgotten like the thousands of other meme coins that come and go.

4. Dogecoin has serious design limitations

While Dogecoin's hype has allowed it to remain more relevant than the typical meme coin, some of the cryptocurrency's early design choices may continue to haunt the network.

The biggest challenge may be inflation. The supply of Dogecoin currently stands at 147.97 billion, with the supply designed to increase by 5 billion coins annually. This is in contrast to Bitcoin (CRYPTO: BTC), which has a hard cap of 21 million coins.

The platform's developers claim this design is to prevent hoarding and make Dogecoin more functional as an actual currency. However, this comes at the expense of being a long-term store of value.

Just like with a fiat currency, investors will experience a constant downward pressure on the value of their holdings as more Dogecoins enter circulation. And unlike the dollar, Dogecoin doesn't boast a plethora of low-risk liquid assets (such as Treasury bonds or certificates of