Dogecoin reaches its high of 43 cents as election enthusiasm continues

Dogecoin (DOGE) rose to $0.4398 on crypto exchange Binance on Tuesday, marking its highest value in over three years.

According to data from CoinGecko, the Shiba Inu-themed meme coin saw a massive 143.2% increase over the past week, significantly outpacing Bitcoin (BTC)'s 28.2% rise over the same period.

The rally follows Donald Trump's election victory and is increasing optimism for speculative assets like Dogecoin as traders bet on crypto-friendly policies. The challenge for DOGE now is to maintain this momentum while attracting long-term institutional interest.

“With the election overhang now behind us, the rally in crypto markets appears to be sustainable, driven by positive future signals from the US,” said Julien Auchecorne, head of Auros Ventures Decipher. “However, uncertainties remain, particularly related to altcoins. We are watching closely to see whether altcoins continue to underperform Bitcoin or whether they begin to outperform, potentially weakening retail interest.”

Elon Musk, the self-proclaimed “Dogefather,” caused even more of a stir last month when he suggested that if appointed by Trump, he could lead a “Department of Government Efficiency” (DOGE) with the ambitious goal of raising $2 trillion or more save more in the federal budget.

The allusion to the acronym “DOGE” sent Dogecoin enthusiasts into a frenzy and propelled the coin to new heights. Musk’s support – whether serious or joking – often leads to a rise in the price of DOGE.

Despite the excitement surrounding Dogecoin, Auchecorne points to some structural challenges in the altcoin market.

“The structure of altcoin launches is under pressure, particularly as institutional incentives still play a strong role in reducing risk at launch and redirecting capital thereafter,” he said. “Protocols are now adjusting their strategies to maintain institutional participation post-launch, taking a more measured approach to their target fully diluted valuations (FDVs).”

For example, in 2022, Aptos – a network founded by former Meta employees – experienced rapid sell-offs by early institutional investors following its launch, leading to sharp post-launch declines. In contrast, protocols like Arbitrum introduce gradual token releases to maintain institutional commitment and achieve more stable growth.

Nevertheless, questions remain about the sustainability of the DOGE rally.

“As these dynamics continue to evolve, we expect capital flows to be selectively directed toward projects that can sustainably balance institutional needs with strong market appeal,” noted Auchechorne.

Amid the retail-driven excitement, Canada-based Spirit Blockchain Capital has said it wants to mirror MicroStrategy's Bitcoin accumulation plan to build large Dogecoin reserves.

Spirit's approach includes the introduction of Exchange Traded Products (ETPs) and payment gateways and seeks to institutionalize Dogecoin's use case beyond its meme origins.

While Dogecoin remains below its all-time high of $0.73 in 2021, its recent rise suggests that it is far from losing its appeal. As CoinGecko data shows, the original meme coin is now the sixth-largest crypto by market cap, ahead of Circle stablecoins USDC and Ripple (XRP).

Edited by Stacy Elliott.