New Study Finds Dogecoin Boosts Returns With Minimal Risk
The crypto investment firm found that even a modest 1% allocation to the tokenwhen paired with Bitcoin in a growth-oriented strategyenhanced overall returns without significantly increasing risk.
By testing a variety of portfolio setups, 21Shares discovered that adding Bitcoin and Dogecoin to a traditional 60/40 stock-bond mix lifted average annual returns from 7.25% to nearly 9%. Risk-adjusted performance improved as well, with higher Sharpe ratios and only a slight bump in drawdowns. The key, the report emphasizes, is consistent rebalancingideally monthlyto prevent volatility from compounding over time.
Why Dogecoin? According to the firm, its relatively low correlation with both traditional finance and the broader crypto market, along with a history of outsized gains, makes it more than just a speculative memeit acts as a genuine diversifier.
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21Shares also offered projections for Dogecoins possible price trajectory this cycle. In a conservative scenario, if the token grows at 10% annually from its 2021 high of $0.73, it could reach around $0.38 by the end of 2025more than doubling from todays prices, but still falling short of a new record.
A middle-ground estimate assumes Dogecoin retains a 3% slice of a crypto market that swells to $5 trillion. That would place its market cap at roughly $150 billion, suggesting a price of about $1.
The bullish view borrows from historical growth trends. If DOGE repeats its past compounded annual growth rate of 189%measured from the 2018 low to the 2022 cycle bottomit could climb as high as $1.42. That outcome would require strong retail momentum, broader utility, and further integration into major platforms, such as Elon Musks X.
For investors willing to take a structured and disciplined approach, 21Shares argues that Dogecoin may be more than a passing internet fadit might just be a smart risk.
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Text source: Coindoo
