Can Dogecoin maintain its position among the top 10 cryptocurrencies for another five years? These three utility-oriented cryptocurrencies suggest it may not.
Dogecoin (DOGE -4.30%) was never truly designed to serve as a practical cryptocurrency. It’s essentially a modified version of Bitcoin, made intentionally less secure and valuable.
However, its charming dog mascot and endorsements from popular meme creators propelled Dogecoin to become one of the leading cryptocurrencies worldwide. With a market cap of $37.6 billion as of October 9, it would rank as a middle-tier stock in the S&P 500 (SNPINDEX: ^GSPC), comparable to well-known companies like Yum! Brands and Delta Air Lines.
Yet, circumstances can change. Five years ago, Dogecoin was merely the 43rd largest cryptocurrency with a market value of $328 million. Nearly a third of the coins that ranked above it back in 2020 have since dropped from the top-100 list, as per CoinMarketCap.
It seems Dogecoin’s time in the limelight may be limited. With tighter regulations, the emergence of crypto-focused exchange-traded funds (ETFs), and the rise of Web3, upcoming dominant cryptocurrencies will need to demonstrate their value through real-world applications. Dogecoin falls short in that regard. By 2030, I anticipate that Chainlink (LINK -1.32%), Avalanche (AVAX 2.24%), and Polkadot (DOT 0.54%) will surpass Dogecoin’s market cap.
Sorry Doge, these coins are stealing your place. Image source: Getty Images.
Exploring the Web3 Movement
As a heads-up, I will frequently reference Web3 concepts in this discussion. In the Web3 era, cryptocurrencies are expected to become mainstream, allowing internet users to take ownership of their data, digital assets, and online identities via blockchain, rather than depending on major tech firms.
1. Polkadot Connects the Crypto World
In this context, Polkadot deserves mention. Created by the Web3 Foundation and driven by Ethereum (ETH -2.60%) co-founder Gavin Wood, Polkadot’s key goal is to assist app developers utilize various cryptocurrencies and blockchain systems. It facilitates data transfers between different cryptos and streamlines the development of intricate crypto applications.
2. Chainlink: Vital for Smart Contracts
Chainlink is another essential element of Web3. This premier oracle coin gathers real-world data and delivers it to blockchain networks, typically triggering smart contracts. Major platforms like Ethereum and Polkadot rely on Chainlink for crucial data feeds, which include stock prices, exchange rates, weather updates, and sports scores. The Web3 ecosystem would struggle without Chainlink, the leading data provider.
3. Avalanche: A Green Alternative for Web3
Lastly, Avalanche stands as a high-performing alternative to Ethereum. This cryptocurrency pairs quick smart contract execution with energy-efficient computing, becoming a favored platform for eco-friendly decentralized applications. The number of applications built on Avalanche is rapidly increasing, featuring diverse projects that were recently launched.
Avalanche now has a market cap of $12.0 billion, up from $7.7 billion six months ago, showing strong promise in the Web3 landscape. It’s likely that Avalanche will surpass Dogecoin within the next five years.
Anders Bylund holds positions in Bitcoin, Chainlink, Ethereum, and Polkadot. The Motley Fool has interests in and recommends Avalanche, Bitcoin, Chainlink, and Ethereum. The Motley Fool also suggests Delta Air Lines. For further details, refer to the disclosure policy.
