Investors are hopping back onto the cryptocurrency bandwagon, with enthusiasm reaching levels not seen since the early months of 2021 during the previous bull market peak. It’s evident in the recent surge in cryptocurrency prices, visible on any price chart.

According to Yahoo! Finance, digital asset funds like BlackRock’s iShares Bitcoin Trust ETF are experiencing unprecedented inflows from investors. Dogecoin (DOGE), often considered the original meme coin, is witnessing a surge in demand, trading at $0.17 per coin, a significant rise from its 52-week low of $0.06.

But can this momentum continue? The answer is yes, with an important caveat.

Here’s the lowdown:

Can Dogecoin hit $0.50 this year? In short, yes, Dogecoin could reach $0.50. Why? Because it’s happened before. Dogecoin surged to over $0.68 in 2021 during the peak of the last crypto bull market, fueled by speculative frenzy and endorsements from billionaire Elon Musk on his social media platform.

Dogecoin does have some technical features that lend it credibility, such as decentralization and a peer-to-peer network similar to Bitcoin’s. It’s also capable of handling more transactions per second than Bitcoin.

However, Dogecoin’s creators never intended it to be a serious financial asset; it was meant to foster a fun community spirit. This is reflected in aspects like Dogecoin’s lack of a hard supply cap, which could hinder its long-term per-token price.

How much potential upside does Dogecoin have? The expanding supply of Dogecoin is a key factor in assessing its potential upside. When Dogecoin reached $0.68 per token in 2021, its market cap peaked at $88 billion. Today, at $0.16, Dogecoin’s market cap stands at $24 billion. If Dogecoin were to hit $0.68 again, its market cap would reach $102 billion, a 16% increase due to the growth in token supply over the past few years.

Without widespread adoption, which Dogecoin currently lacks, its price will depend solely on short-term sentiment. This inherent riskiness makes Dogecoin susceptible to unpredictable price swings driven by sentiment shifts.

What’s your strategy? Whether it’s Dogecoin or another cryptocurrency, it’s crucial to approach crypto investment responsibly. While crypto is gaining popularity among young investors, it remains a highly volatile asset class and should only form a small part of your investment portfolio. Focus on building a solid foundation with high-quality stocks and ETFs, and consider crypto as a supplementary investment for potential upside.

While Dogecoin’s price may continue to rise, it’s important to be cautious, especially considering its long-term fundamentals don’t support sustained high prices. If you make profits quickly, don’t hesitate to take them, as buying and holding could be risky in the long run.