$500 Invested in Dogecoin at the Start of 2021 Would Be Worth This Much Today!

Will Dogecoin be able to replicate its stellar historical gains in the future?

Man holding magnifying glass over a document

Image source: Getty Images.

Despite a turbulent end to the last week, most cryptocurrencies have regained momentum in recent trading sessions. One of the most popular digital assets in this space is Dogecoin, which has gained close to 3,676% in the first 11 months of 2021. So, an investment of $500 in DOGE at the start of the year would be worth close to $18,500 today.

Dogecoin has in fact created massive wealth for long-term investors. Launched in 2013, the DOGE token has returned a staggering 99,000% in the last five years. If you were an early cryptocurrency adopter and invested $500 in the DOGE token back in December 2016, your investment would be worth close to $500,000 today.

Dogecoin is now the 10th-largest cryptocurrency in the world, valued at a market cap of US$28.46 billion. However, past returns don’t matter much to current and future investors. Despite recording astronomical gains for long-term investors, Dogecoin is also down 70% from record highs, allowing you to buy the dip.

Let’s see if this meme coin has the potential to increase investor wealth in the future.

Dogecoin is a popular meme token

While Bitcoin and Ethereum are two of the world’s largest cryptocurrencies, the average monthly searches for Dogecoin on Alphabet’s Google stand at seven million, easily outpacing the search results of both the heavyweights combined.

One of the key drivers of Dogecoin’s gains in the last year was the backing of billionaires such as Elon Musk and Mark Cuban, both of whom own the digital asset. Musk, in fact, confirmed he is working with Dogecoin developers to improve the blockchain network in terms of transaction fees as well as processing times.

On the flip side, the optimism surrounding Dogecoin might also seem misplaced, as the network does not enjoy any significant competitive advantage. Its transaction fees are higher than several other cryptocurrencies. The DOGE token is currently accepted by fewer than 2,000 merchants all around the world and the daily blockchain transactions on the network touched a three-year low in September 2021.

What’s next for DOGE investors?

Dogecoin has a first-mover advantage as it predates cryptocurrencies such as Ethereum, Solana, and Cardano. According to data from CoinMarketCap, the DOGE token is on the watchlist of more than 1.3 million users compared to Bitcoin, which is on the watchlist of 2.7 million users. Dogecoin also has more than two million subscribers on Reddit, showcasing the strength of its community.

One of the most vital characteristics of Bitcoin is that the cryptocurrency is designed to function as a medium of exchange as well as a store of value. The total number of Bitcoin that can ever be mined is limited to 21 million. Alternatively, Dogecoin is anti-inflationary, as there are already 132 billion coins in circulation, and this number will increase by five billion each year, leading to erosion of the token’s long-term value. Further, unlike Ethereum or Solana, Dogecoin does not allow users to create and execute smart contracts on its blockchain network.

The Foolish takeaway

It’s difficult to predict the direction of cryptocurrencies given the lack of regulation and volatility associated with this space. However, right now the risks associated with owning the DOGE token outweigh the rewards, given there are far better blockchain platforms that you can place your bets on right now.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet (A shares) and Alphabet (C shares).

More on Cryptocurrency

crypto, chart, stocks

Where Is Polkadot Headed in 2022?

Here's why Polkadot (CRYPTO:DOT) may be headed higher during the latter half of this year, following a dismal start to…

Read more »

A stock price graph showing declines

Struggling Cryptos: Market Cap Falls 3.37% Overnight  

The global crypto market lost a significant amount of its market cap overnight, as the selling pressure on cryptocurrencies continue.

Read more »


Bitcoin Tanks 38% in 2022: Buy It Cheap?

Bitcoin has fallen considerably this year, and it might be worth investing in at a discount for stellar returns.

Read more »

Person Hands Opening Mailbox To Remove Newspaper

XRP vs. SEC Lawsuit: Some Interesting Developments

The summary judgment in the ongoing legal battle in the cryptocurrency market might come in 2023, not this year.

Read more »

crypto blockchain

Is XRP the Large-Cap Crytpocurrency to Own Right Now?

Let's take a deeper look at whether XRP (CRYPTO:XRP) is a digital token worth investing in at this particular juncture…

Read more »


Can the Ethereum Merge Take This Token to New All-Time Highs?

Here's a dive into what the upcoming Ethereum merge is and why investors may want to pay attention to this…

Read more »

crypto, chart, stocks

2 Top Crytos to Buy Right Now

Here are two top cryptos investors may want to consider right now, given the sharp selloff we've seen in this…

Read more »

Diagonal chain made of zeros and ones. Cryptocurrency and mining.

2 Cryptocurrency Stocks Investors Can Buy Right Now

Cryptocurrency stocks such as Coinbase and Hut 8 Mining are trading at attractive valuations, making them attractive to long-term investors.

Read more »