2025-12-24 10:58:12

Dogecoin experiences contradictory influences: on one side – supply issues, on the other – declining meme popularity.

1. **Block reward reduction discussion** – The proposed 90% reduction could decrease inflation but threatens miner exit.

2. **ETF issues** – Existing funds are not attracting capital; new applications show institutional investor patience.

3. **Macroeconomic challenges** – Strong GDP growth reduces the chances of interest rate cuts, putting pressure on risk assets, including DOGE.

## Detailed Analysis

### 1. Proposal to reduce block rewards (mixed impact)

**Overview:**

In April 2025, a controversial proposal emerged on GitHub to reduce Dogecoin’s block reward from 10,000 to 1,000 DOGE, which would cut the annual supply from 5 billion to 500 million coins. Supporters believe this will reduce inflation (by about 3%) and make Dogecoin more similar to Bitcoin in terms of limited supply. Critics warn that miners might leave the network if rewards drop before the price compensates for the losses, threatening network security.

**What does it mean:**

Approval could boost DOGE’s long-term value by slowing supply growth, but in the short term, miner exits could disrupt the network. Historically, DOGE’s inflation has not prevented price growth, but perception shifts are important.
### 2. ETF acceptance and reality (bearish factors)

**Overview:**

The Dogecoin ETF launched in November 2025 currently does not attract significant capital — Grayscale and Bitwise funds together hold only $2.05 million, with no inflows observed over 8 consecutive days. However, the sixth amendment to the 21Shares (December 2023) application indicates ongoing institutional interest, despite weak demand.

**What does it mean:**

Low capital flows into ETFs reflect declining retail interest and competition from Bitcoin- and Ethereum-based products. However, approval of new applications (for example, TDOG from 21Shares ) could revive speculative interest if macroeconomic conditions improve.
### 3. Macroeconomic pressure (bearish influence)

**Overview:**

US GDP growth in Q3 reached 4.3%, while core PCE inflation (core PCE) remains high — 2.9%, reducing the likelihood of interest rate cuts by the Federal Reserve in early 2026. Higher interest rates strengthen the dollar and reduce liquidity for risk assets. The correlation between DOGE and Nasdaq over 30 days in December reached 0.78, increasing market risk.

**What does it mean:**

With altcoins falling 16.89% in a month compared to BTC’s 0.78% decline, DOGE faces strong selling pressure if risk-avoidance sentiment persists. The fear and greed index at level 27 (extremely fear) indicates weak demand from buyers.
Dogecoin’s future depends on the balance between miner motivation (reward reduction), renewed ETF demand, and the ability to overcome unfavorable macroeconomic conditions. Monitoring the $0.13 support level is crucial — breaking below could trigger a liquidation cascade down to $0.09. *Can DOGE’s meme popularity offset its inflation structure amid high interest rates?*

DOGE0,66%

BTC-0,49%

ETH1,14%

View Original

ASSA

2025-12-24 03:17:12

Dogecoin is experiencing a contradictory influence: on one hand, there are supply issues, and on the other, a weakening popularity of memes.

1. **Discussion on Block Reward Reduction** – The proposed 90% cut could reduce inflation but poses a risk of miners leaving.

2. **ETF Issues** – Existing funds are not attracting capital; new applications show the patience of institutional investors.

3. **Macroeconomic challenges** – Strong GDP growth reduces the chances of interest rate cuts, which puts pressure on risk assets, including DOGE.

## Detailed Analysis

### 1. Proposal to reduce block rewards (mixed consequences)

**Overview:**

In April 2025, a controversial proposal appeared on GitHub to reduce the block reward for Dogecoin from 10,000 to 1,000 DOGE, which would decrease the annual issuance from 5 billion to 500 million coins. Proponents believe this will reduce inflation (currently around 3%) and make Dogecoin more similar to Bitcoin in terms of limited supply. Critics warn that miners may leave the network if the reward drops before the price compensates for losses, which would jeopardize the network's security.

**What does this mean:**

Approval may increase the long-term value of DOGE by slowing the growth of supply, but in the short term, the departure of miners could destabilize the network. Historically, DOGE's inflation has not hindered price growth, but changes in perception are important.
### 2. Acceptance of ETF and reality (bearish factor)

**Overview:**

ETFs on Dogecoin, launched in November 2025, are currently not attracting significant funds — Grayscale and Bitwise funds together hold only $2.05 million, with no inflow of funds observed for the past 8 days. Nevertheless, the sixth amendment in the 21Shares application (December 2023) indicates a continuing interest from institutional investors despite weak demand.

**What does this mean:**

The low inflow of funds into ETFs reflects a decline in retail interest and competition from Bitcoin and Ethereum products. However, the approval of new applications, such as TDOG from 21Shares, may revive speculative interest if the macroeconomic situation improves.
( 3. Macroeconomic pressure )bearish influence###

**Overview:**

The GDP growth of the USA in the third quarter was 4.3%, and the core inflation (core PCE) remained high at 2.9%, which reduced the likelihood of the Federal Reserve lowering rates in early 2026. Higher rates strengthen the dollar and reduce liquidity for risk assets. The correlation of DOGE with Nasdaq reached 0.78 over 30 days in December, amplifying risks in the stock market.

**What does this mean:**

With altcoins falling by 16.89% over the month compared to BTC's decline of 0.78%, DOGE is experiencing strong selling pressure if the sentiment remains risk-averse. The fear and greed index at 27 (extreme fear) indicates weak demand from buyers.
The future of Dogecoin depends on the balance between miner motivation (the reduction of rewards), the revival of demand for ETFs, and the ability to cope with adverse macroeconomic conditions. It is important to monitor the support level of $0.13 — its breakout could trigger a chain reaction of liquidations with a drop to $0.09. *Will the meme popularity of DOGE be able to offset its inflationary structure in a high-rate environment?*

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.