This crypto just surged past Dogecoin today

by Arthur · February 9, 2023

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What happened

Fighting to retain a top-10 position in cryptocurrency rankings by market capitalization, Dogecoin (DOGE -10.00%) is still on the list. However, today’s 24-hour decline of 7.3% as of 4:00 PM ET has pushed Dogecoin to 10th place, one spot behind Polygon (MATIC -6.03%).

Polygon is also down, losing 1.9% in the past 24 hours from 4 p.m. ET. However, this is also a sign that has seen much more significant outperformance compared to its majors in recent weeks, as a result of strong fundamentals, particularly when it comes to the network’s NFT sales. The sale of non-fungible tokens on Polygon’s layer-2 scaling network has surpassed Ethereum by a fairly wide margin in January, which led to considerable interest in this high-growth project into February.

Dogecoin’s relative lack of catalysts today, combined with some fairly broad-based selling pressure, has led to significant underperformance relative to Polygon and other utility-based tokens.

So what

The big catalyst that led to recent spikes in Dogecoin had to do with, you guessed it, Elon Musk. The self-proclaimed Dogefather hinted at turning Twitter into a paid network in late January. Naturally, the Dogecoin community jumped on this news, jumping to the conclusion that any such payment network would have to be powered by Dogecoin.

May be. But here lies the difference between certain meme projects like Dogecoin and Polygon, for example. Speculative catalysts can result in peaks in the short term, and when there is excitement in the market, there is an abundance of such projects. But on days like today when there is little positive to talk about in the market, Dogecoin can give significantly worse results.

What now

I find Polygon’s recent fundamental performance (1.5 million NFT sales on Polygon’s network versus 1.1 million sales on Ethereum in January) compelling. There are numbers and data to back up an investment in Polygon. With Dogecoin, not so much.

The question of how and why Dogecoin retains its top-10 position in the ranking of cryptocurrency market values may therefore receive more discussion. I’m not sure that any meme token, which derives a significant portion of its value from speculation and hype, should be listed among the major utility generating players. But that’s just me.

Today, Dogecoin has moved one spot closer to being relegated to a top-15 position, like its meme token peer Shiba Inu. For better or for worse, I think it’s likely that Dogecoin will continue to move down the rankings as investors value substance over hype as the next bull market rally begins (who knows, maybe it’s already underway).