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Dogecoin (CRYPTO: DOGE) might be one of the oldest cryptocurrencies around, but it is undoubtedly one of the most volatile on the planet. Just in 2024, it has taken its owners on a roller-coaster ride.

As of this writing, this meme cryptocurrency trades at about $0.10, about 86% off its all-time high of $0.74 per coin that was established in May 2021. But can Dogecoin one day reach $1? It's possible, but only if this happens.

Boosting utility

The first obvious thing that could send Dogecoin's price soaring is if the coin's utility gets a boost. Right now, DOGE can be used to tip users who post on Reddit . Bulls are hoping the same thing will be possible for social media platform X, as its owner, Elon Musk, has publicly voiced his opinion about the crypto in the past. In total, Dogecoin can be used as a payment method at 2,594 different merchants. That's nothing to write home about.

The fact that Dogecoin is its own blockchain network, as opposed to being compatible with Ethereum in the way Shiba Inu is, means that it has limits in terms of its ecosystem of decentralized applications . And the fact that there are only 21 full-time developers working on it, compared to almost 2,800 for Ethereum, doesn't bode well.

But if Dogecoin can somehow increase its utility, demand for its native coin will rise. This is one key ingredient in making the price increase.

However, in its 11-year history, Dogecoin has seriously lacked in this regard. Its price movements are driven more by various hype cycles than they are by anything related to the fundamentals.

Reducing supply

Another catalyst that could propel Dogecoin's price to new heights has to do with its structure. This is a key aspect investors should be aware of with any cryptocurrency project.

Bitcoin gets a lot of attention because it has a fixed supply cap. It has a pre-determined growth rate that enforces the long-term limit of 21 million coins (about 19.7 million now circulate). This element of scarcity is extremely valuable for some investors, which probably helps explain why the world's top crypto carries a market cap of about $1.2 trillion.

Here's where Dogecoin seriously underwhelms. There are now almost 146 billion coins in circulation. That's a gargantuan sum. But to make matters worse, there are 10,000  coins added to the supply every single minute. This means that in an entire year, the supply expands by more than 5 billion coins.

This unfavorable setup makes it extremely difficult for the price to rise. Demand, already subdued because of a lack of utility, has to outpace a constantly expanding supply. That's not an ideal situation for investors.

If Dogecoin's developers implemented a coin burning scheme that aggressively reduced the supply, it would be a step in the right direction. But there are no plans in place to do this.

Be realistic

Since the start of 2023, the cryptocurrency market has climbed about 170% in value. During the same time, Dogecoin's price is up about 50%. This is a worrying development because it shows that even one of the most speculative tokens can't benefit as much as you'd imagine during the industry's bull run. It has seriously underperformed the broader digital asset market.

While there seems to be a path to get to $1, namely by boosting utility and drastically cutting supply, I'm not very confident this outcome is likely. Consequently, Dogecoin remains a very risky bet. Investors have more promising cryptocurrencies to consider buying instead.

Before you buy stock in Dogecoin, consider this: