It's been nearly three years since Dogecoin (DOGE -2.58%) took the cryptocurrency world by storm. Although the mania has passed, Dogecoin remains among the top 10 cryptocurrencies by total market capitalization.

For many optimists, there is a glimmer of hope that Dogecoin could recapture the spotlight and even achieve the highly coveted $1 mark, implying a 14-fold increase. Here, we'll delve into three key reasons Dogecoin's path to $1 will likely prove elusive.

1. Unlimited supply

In the quest to understand Dogecoin's potential to reach $1, one crucial aspect to consider is its unlimited supply. Unlike other cryptocurrencies, such as Bitcoin, which have a finite supply, Dogecoin's limitless issuance poses a significant challenge in maintaining its price stability over the long term. 

The principle of supply and demand holds immense influence over cryptocurrency valuations. If demand fails to match the constant influx of new coins, the inevitable consequence may be a gradual decline in its price. This obstacle is particularly pertinent to Dogecoin, since nearly 5 billion new coins enter circulation every year, adding to the existing supply of about 141 billion.

While other factors contribute to a cryptocurrency's value, the scarcity factor driven by a limited supply has proven to be a crucial determinant. Therefore, for Dogecoin to reach $1, it must overcome the inherent dynamics of supply and demand.

2. Lack of utility

Another hurdle between Dogecoin and the coveted $1 mark is its lack of utility. While some cryptocurrencies have multiple use cases, Dogecoin falls short in this aspect. Unlike its counterparts which are utilized in novel use cases such as non-fungible tokens (NFTs), decentralized applications, and various other purposes, Dogecoin's sole function is limited to payments. 

Unfortunately, this feature fails to set it apart from other cryptocurrencies. The lack of diverse utility significantly limits Dogecoin's appeal, as cryptocurrencies with innovative use cases tend to attract increased demand from investors. With minimal use cases, demand for Dogecoin will likely remain subdued and unable to outpace its unlimited supply. 

3. Supply and demand issues

The price history of Dogecoin reveals all investors need to know about its meager utility and the intricate interplay between supply and demand dynamics. Look no further than Dogecoin's initial rise to fame in 2021, when its price reached $0.74, skyrocketing nearly 16,000% in just under six months.

This six-month run is the one and only point in Dogecoin's history where demand surpassed supply. However, the reasoning behind this ascension is directly related to social media hype and speculative fervor, not desirable traits or utility.

Since that peak, Dogecoin has experienced a downward spiral, with just a few short-lived rallies thanks to the efforts of Elon Musk taking to Twitter (now known as X) to endorse it. There has been brief speculative optimism that the rebranding of Twitter to X will include some new Dogecoin-centric features. Still, even if it does, the likelihood that it will be enough to sustain demand relative to an ever-increasing supply looks increasingly slim. 

The harsh truth 

The future outlook for Dogecoin appears rather dim, with little indication of regaining momentum outside sporadic efforts driven by Musk. The prospect of Dogecoin surpassing the $1 mark remains unlikely because it would require defying the laws of supply and demand -- an almost insurmountable task. 

The cryptocurrency's sole hope of reaching such a milestone would hinge on a resurgence in the spotlight. As such, investors would be wise to explore better known cryptocurrencies, such as Bitcoin or Ethereum, because Dogecoin's glory days remain confined to the past.