Popularity Doesn’t Seem to Be Helping Dogecoin Grow Its Market Cap thumbnail

Popularity Doesn’t Seem to Be Helping Dogecoin Grow Its Market Cap

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New research suggests Dogecoin (CCC:DOGE-USD) is the most-googled cryptocurrency so far in 2021.

Dogecoin coins with doge faces peeking out of brown leather wallet. The coins have the words

Source: shutterstock.com/Igor Igorevich

According to The Advisor Coach, a business that helps financial advisors get more clients, Dogecoin is the most-googled cryptocurrency in 23 states, far exceeding Bitcoin (CCC:BTC-USD), which was tops in 10. In comparison, Ethereum (CCC:ETH-USD) came third with eight states. 

There is no question that cryptocurrencies of all sizes are on the receiving end of more web searches. After all, in a year, crypto assets have grown from $500 billion to $3 trillion. 

But I have to wonder if these web searches are translating into actual Dogecoin purchases. 

Let’s consider the possibility. 

Dogecoin Could Fall Out of Top 10

According to CoinMarketCap, Dogecoin has a market capitalization of $28.4 billion. That puts it in the 10th spot amongst crypto assets, ahead of Avalanche (CCC:AVAX-USD) at $25.9 billion and behind USD Coin (CCC:USDC-USD) with $37 billion. 

So, at this point, it’s more likely to fall out of the top 10 than move up to ninth position. That’s because AVAX-USD had been on a tear in November until it started to cool off on Nov. 22. Up until then, it was up 111%. In the same period, DOGE-USD was down 18%. 

Markets Insider reported the following about Avalanche on Nov. 22:

“Avalanche has climbed 37% over the last 7 days whilst the rest of the top 10 cryptos have seen red. The significant driving factor for AVAX’s entrance into the top 10 was the partnership with Deloitte, one of the ‘Big Four’ accounting organizations and the largest professional services network in the world,” GlobalBlock sales trader Freddie Williams said.

As this is the first time I’ve covered Avalanche – and it’s not a crypto I’ve been following – the reference to Deloitte catches my interest. 

On Nov. 16, the consultant announced its strategic alliance with Ava Labs, the developers of Avalanche. Reading through the press release, it screams utility, which can’t be said for Dogecoin.

In a nutshell, the Close As You Go (CAYG) platform allows state and local governments to easily apply for disaster reimbursements from the Federal Emergency Management Agency. 

“Our new Close As You Go platform can play a critical role in helping these leaders be prepared to aggregate and validate the documentation necessary to demonstrate eligibility for funding and reduce the risk of adverse audit findings down the road,” Deloitte & Touche LLP principal Alex Haseley said in its press release announcing the strategic alliance. 

A few more of these announcements from Ava Labs and it won’t matter how many internet searches there are for Dogecoin, investors will understand and support Avalanche’s actual utility. Something Dogecoin can’t provide.

The Top States Owning Dogecoin and Other Cryptos

Coinbase (NASDAQ:COIN) produced a report in 2019 entitled The United States of Crypto. And while the information is dated, by understanding it, I think one can make some assumptions about the ownership of Dogecoin versus googling the word Dogecoin. 

For example, the 10 states with the largest crypto ownership are California (Shiba Inu), New Jersey (Dogecoin), Washington (Shiba Inu), New York (Shiba Inu), Colorado (Cardano), Utah (Ethereum), Florida (Dogecoin), Alaska (Bitcoin), Nevada (Shiba Inu), and Massachusetts (Dogecoin). The crypto with the most web searches for each state is in parentheses.  

Now, I know the ownership stats have likely changed some, but the one thing that we do know is that Shiba Inu (CCC:SHIB-USD) appears to have gotten more traction from its internet searches than Dogecoin. 

How’s that, you ask?

Well, SHIB-USD has appreciated by 49.5 million percent in 2021 compared to 4,404.5% for Dogecoin. Based on Shiba Inu’s relative growth, it’s no surprise that it rocketed to 13th place with a market cap of $20.8 billion, just $7.6 billion from catching Dogecoin. 

While I don’t believe Shiba Inu has any utility, much like DOGE-USD, it certainly is the crypto of the two that’s got some momentum heading into 2022.

The Bottom Line

Interestingly, of the top 10 states owning crypto according to Coinbase research, Shiba Inu is the leading crypto in web searches, one more than Dogecoin. Two of the top 10 states for crypto ownership are California and New York. In those states, Shiba Inu has the most web searches. Their combined population of 59 million is 18% of the entire U.S. 

So, while I might not have proven that Dogecoin’s popularity has done little to grow its market cap, I think it’s fair to say that Shiba Inu’s popularity has.

That’s not good if you own DOGE-USD. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.