Why is DOGE no longer crazy? From Meme narrative to changes in capital structure, a re-understanding of Dogecoin's cycle position

December 16, 2025, according to Gate market data, DOGE (Dogecoin) is currently trading at $0.129, down 4.95% in the past 24 hours. The intraday high was $0.137, and the low dropped to $0.126, with a 24-hour trading volume of approximately $26.89 million. Looking at a longer time frame, the highest point in the past two years for DOGE occurred in 2024, with a price of about $0.48, significantly below the all-time high of $0.739 set in May 2021.

Against the backdrop of Bitcoin and some mainstream assets continuously reaching new highs, DOGE, as the leading Meme coin, has shown relatively subdued performance in this cycle. This has prompted the market to re-examine a question: why was DOGE able to sustain its upward trend in the past, and why has its upward momentum clearly weakened at present?

What is the core logic behind DOGE’s early rise

DOGE’s creation was not centered on technological innovation but was a satirical Meme project. However, this “no narrative burden” attribute gave it strong transmissibility under certain market conditions.

During the bull market of 2020 to 2021, DOGE’s rise was mainly driven by the convergence of three forces. First, there was a high concentration of retail investor sentiment. At that time, global liquidity was extremely loose, with a large influx of new users into the crypto market. DOGE, with its low price, high elasticity, and strong entertainment value, became the best vehicle for retail sentiment expression. Second, social media amplification, especially frequent mentions by celebrities, allowed DOGE to quickly break out of traditional crypto circles and spread across multiple platforms. Lastly, market structure issues played a role; in a phase with limited liquidity and immature derivatives markets, DOGE was easily pushed up by capital and formed trends.

During this period, DOGE’s price increase was not reliant on fundamental improvements but was more a typical Meme market driven by sentiment, consensus, and capital.

Why does DOGE underperform expectations in this cycle

Compared to 2021, the current market environment for DOGE has changed significantly. The most critical factor is the high level of competition within the Meme sector. DOGE is no longer the sole Meme narrative center; PEPE, SHIB, and various emerging Meme coins continuously divert market attention, breaking DOGE’s “emotional monopoly.”

Meanwhile, the capital structure has also shifted. The incremental capital in the current market is more focused on Bitcoin ETFs, the Ethereum ecosystem, and application assets with clear narratives. Due to the lack of a clear technological upgrade path and innovative economic models, DOGE finds it difficult to attract medium- and long-term capital allocations.

Another important factor is DOGE’s inflation structure. Unlike Bitcoin’s fixed supply, DOGE still has ongoing issuance each year. During periods of tightening liquidity or declining market risk appetite, this can naturally suppress the price. When sentiment-driven momentum weakens, the continuous supply can amplify price corrections.

From a capital perspective, why is DOGE’s rise harder to replicate

If DOGE in 2021 was a “retail-dominated asset,” the current crypto market is shifting toward “institutional and structured capital dominance.” In this transition, DOGE’s disadvantages are becoming more apparent.

Institutional capital focuses more on sustainable use cases, clear governance structures, and long-term value anchors, areas where DOGE does not excel. Even if short-term sentiment-driven rebounds occur, they are more likely to be viewed as trading opportunities rather than long-term holdings.

Additionally, the maturity of the derivatives market is compressing DOGE’s potential for unilateral upward movement. The proliferation of futures and options makes it easier to hedge and arbitrage prices within key ranges, making it difficult to reproduce the continuous rally seen in earlier periods.

Does DOGE still have a chance in the future

From a cycle perspective, DOGE has not completely lost its opportunity, but its market nature has changed. In the future, DOGE is more likely to show phased impulsive rises rather than sustained trending movements. Such increases often depend on specific triggers, such as concentrated social media sentiment, celebrity events, or short-term explosions in the Meme sector.

If macro liquidity becomes significantly looser again and risk appetite rises sharply, DOGE, as the Meme leader, could still outperform the market for a period driven by sentiment. However, without structural narrative upgrades, its price is highly likely to remain limited around historical highs.

From a long-term perspective, DOGE is more like a market sentiment indicator rather than a fundamental asset. It reflects retail participation, speculative sentiment, and liquidity conditions, rather than technological progress or application growth.

The evolution of DOGE essentially mirrors the maturation of the entire crypto market. As the market shifts from emotion-driven to structure-driven, assets relying solely on Meme consensus will naturally face diminishing marginal appeal.

This does not mean DOGE will disappear, but rather that it will no longer serve as the “bull market flag-bearer.” Future DOGE is more likely to shine in specific phases rather than being a mainstay throughout the entire cycle.