Dog (DOG)

meme Sep 02, 2024

DOG, in simple terms

DOG is a decentralized, community-led memecoin launched in April 2024.

Being a memecoin, it has no use case. You can't do anything with DOG.

However, coins without use cases can do great regardless of their "uselessness".

In fact, the memecoin sector is the best-performing sector in the altcoin market so far this year.

But DOG stands out amongst other memecoins.

Here's why:

An Unusual Launch

The story begins in 2023 when "ordinals," akin to NFTs, emerged on the Bitcoin blockchain.

Their technical complexity meant that only serious crypto enthusiasts engaged with them.

Most people have never even heard of Ordinals.

In March 2024, an individual known as "Leonidas" on the platform X (formerly Twitter) launched an ordinal named "Runestone" and distributed it to 112,383 wallets.

Targeting genuine crypto fanatics, Leonidas airdropped Runestones exclusively to BTC wallets that held at least three ordinals.

The Runestone swiftly became the most noteworthy ordinal on Bitcoin, with its value hitting a high of $7,000 per stone in April one month after launch.

This brought the airdrop's total value close to one billion dollars.

Leonidas didn't stop there; he announced another airdrop, a new token named "DOG."

It was distributed only to Runestone holders, ensuring a fair launch without insider pre-distribution.

This way of launching is a big deal.

Typically, memecoins are pre-distributed to insiders who gradually sell to new investors, exploiting them and making a killing. This can involve anywhere from 20% to 75% of the initial supply, leading to significant price manipulation.

However, DOG was launched differently, with 100% of the supply airdropped to existing Runestone holders, eliminating the possibility of insider trading and price manipulation.

Over 75,000 crypto enthusiasts held a Runestone and got DOG which ignited the community and resulted in DOG becoming one of the largest memecoins in the crypto space.

My Thesis on DOG

There are several reasons why DOG might outperform other memecoins in this bull market:

It has no insiders ready to dump on new investors.
It is built on Bitcoin, the largest blockchain by far.
It's still technically challenging to buy, leaving much demand pent up.
There are no marketing efforts, which means that exchanges must buy DOG to list it.
The community is extremely active.

I could go on, but in my opinion, it all boils down to this:

The holders of DOG are true crypto believers, and most are "in it for the ride". They got DOG because they held Runestone, which they got because they had 3 ordinals before March 2024. DOG and Runestone is a badge of honor for these people.
The community is super active, spreading DOG to all corners of the crypto-verse. This makes the price go up.
Since there are no insider whales, there is no market manipulation, which enables the price to keep rising when it takes off.

In other words:

The DOG community is a bunch of true crypto enthusiasts and they spread the word about DOG, making the price go up. Unlike other memecoins, there are no insiders to dump on new investors when the price moves, and the community is made of "diamond-handed believers" who apparently "refuse to sell".

Basically, lots of buying and little selling = price goes up.

Furthermore, "Runes" (tokens on Bitcoin) is "the new thing" in crypto, and DOG is the leading Rune.

Below, you see the top 7 Runes ranked my all-time volume:

By this point, you're probably wondering:

What price might DOG reach during this bull market? And what is the potential ROI of investing at current prices?

Future Potential Price of DOG

The absolute maximum price I think possible for DOG is $1.44, continue reading to see why.

Let's compare it to other memecoins in terms of market cap.

Below you see the top 9 memecoins by market capitalization compared to DOG:

DOG is #19 with a market cap of roughly $550 million.

Remember, price = market cap divided by supply. Using this equation, we can calculate the price DOG would reach if it had the same market cap as the other memecoins:

So if DOG reaches the same market cap as Dogecoin, the price will be $0.1644.

But the crypto market will not stay still while DOG climbs the ranks.

Let's make two assumptions:

The crypto market will 4x
BTC dominance will decrease to 30%.

Making these two assumptions, let's calculate the maximum potential of DOG:

Maximum Potential for DOG

Including the assumptions, we first have to multiply everything by 4, due to the general 4x of the crypto market.

Furthermore, we assume that the BTC dominance drops to 30% from its current 53%. This means that the altcoin market grows from 47% to 70%, which is a 50% increase. Therefore, we need to multiply everything by 1.5.

In summary, we need to multiply everything by 4 * 1.5 = 6 to take the two assumptions into account.

Given these assumptions, DOG will cross $1 if it catches up to DOGE:

If the meme-dog on Bitcoin (DOG) outgrows the meme-dog on Ethereum (DOGE), the ROI is a mind-bending 18,130%.

In more concrete terms: $1,000 -> $181,300

Do I think that DOG will become the largest memecoin? Probably not, but it's not impossible.

After all, there's a case to be made for the largest blockchain to have the largest memecoin.

Let me explain:

Another way to look at the valuation of memecoins is by the percentage of the market cap of the underlying blockchain.

Dogecoin's market cap is roughly 4% of Ethereum. DOG has only reached 0.05% of Bitcoin's market cap:

Let's assume Bitcoin reaches $180,000 at the peak of this cycle.

In that case, the market cap of Bitcoin would reach roughly $3.6 trillion.

If DOG reaches 4% of that, the market cap of DOG will climb to $144 billion.

Since market cap divided by supply = price, the price can be calculated as follows:

$144,000,000,000 / 100,000,000,000 = $1.44.

In summary:

If Bitcoin reaches $180K and DOG gains the same share of the underlying chain as Dogecoin, the price of DOG will reach $1.44.

Important: Please, do not read this as a price prediction. Rather, it is a kind of qualified thought experiment. I do not expect this to materialize.