The cryptocurrency markets have witnessed a remarkable journey this year. Once plunged into a cold winter during 2022, with the cumulative value of every coin and token in the market falling to just $828 billion from a peak of $3 trillion in 2021, the industry has now emerged in a much stronger position. The total value of all cryptocurrencies in the market now sits at a new record high of $3.5 trillion.

Unraveling the Crypto Conundrum - Which Coin Reigns Supreme?

The Case for Dogecoin

Dogecoin, with a remarkable 362% gain this year, is still trading below its 2021 record high of $0.73. Just two months ago, it was near a 52-week low. However, everything changed when former President Trump won reelection with the help of Tesla CEO Elon Musk. Musk, a vocal advocate of Dogecoin in 2021, regularly promoted it on social media using memes and even participated in a related comedy skit on Saturday Night Live. But unfortunately, the cryptocurrency plunged by 92% after that event as investors realized there was no concrete plan to back up his support.Simply put, Dogecoin's 2021 rally was built on speculation, and this time seems no different. After Trump's election win on Nov. 5, he announced the formation of the Department of Government Efficiency, or D.O.G.E for short, with Musk set to run it. This seems to be a driving force behind Dogecoin's recent surge, although there is no indication that the token will play a role in the new government department. Even if Musk finds a use case for Dogecoin, it may not lead to more upside. Currently, only 2,520 merchants worldwide accept Dogecoin as payment, and many of them are obscure internet companies and online gambling platforms. This lack of utility is a significant hurdle for Dogecoin to create sustainable value for investors.

The Case for Shiba Inu

Shiba Inu rose to fame shortly after Dogecoin and delivered one of the best returns in financial market history in 2021, soaring 45,278,000%. If you invested just $3 in Shiba Inu on Jan. 1, 2021, your position would have been worth over $1 million by Dec. 31. But like Dogecoin, Shiba Inu lost over 90% of its peak value in 2022. Speculative frenzies don't last, and this meme token lacks a prominent figure like Elon Musk to keep investors interested.In 2024, Shiba Inu has gained 146% on the back of improving sentiment across the crypto industry. However, it is still not even halfway to reclaiming its 2021 all-time high. The Shiba Inu community has tried to create new use cases to support its value, such as building a metaverse where investors could spend their Shiba Inu tokens to customize virtual blocks of land. But three years later, the virtual world still hasn't launched. Only 1,032 merchants worldwide accept Shiba Inu as payment, indicating even less real-world utility than Dogecoin. Therefore, it's not surprising if the latest rally eventually fizzles out.

The Case for Bitcoin

Bitcoin is the world's largest cryptocurrency, with a market capitalization of $1.9 trillion, accounting for over half of the crypto industry's total market cap. With a year-to-date gain of 121%, Bitcoin is up less than Dogecoin and Shiba Inu but is actually trading at a record high.Unlike Dogecoin and Shiba Inu, Bitcoin doesn't have widespread acceptance as payment in daily shopping places. However, it has become a reliable store of value, with many experts comparing it to digital gold. The U.S. Securities and Exchange Commission (SEC) has approved dozens of Bitcoin exchange-traded funds (ETFs) this year, providing financial advisors and institutional investors with a regulated way to own the cryptocurrency. The top 10 ETFs alone manage almost $100 billion in client money, and as this number continues to grow, it foreshadows further upside in the price of Bitcoin.The value of above-ground gold reserves worldwide is currently $18 trillion. If the wider investment community truly adopts Bitcoin as a digital alternative to gold, it could imply a price-per-Bitcoin of around $909,000, representing a potential 826% upside from its current trading price. Some Wall Street analysts even think Bitcoin can go even higher in the long run. For example, Cathie Wood's Ark Investment Management believes the price of a single Bitcoin could rise to $1.48 million by 2030 based on eight potential factors, including adoption by institutional investors and becoming digital gold.

The Verdict

All three cryptocurrencies are speculative assets, and investors buy them mainly in the hope of higher prices in the future. However, Bitcoin probably has the best chance to deliver long-term upside. Despite several steep corrections over the last decade, it has always recovered to make new highs, instilling more confidence in investors about its effectiveness as a store of value. On the other hand, Dogecoin and Shiba Inu have not shown the same resilience and are unlikely to win the support of regulators or institutional investors in the future. Therefore, if you are considering buying either of them, proceed with caution.