A new study finds that Dogecoin increases profits with minimal risk.

Dogecoin may have initially been just a joke, but according to a recent study by 21Shares, a small amount of DOGE in a portfolio could yield significant results. Cryptocurrency investment firms have found that even a modest allocation of 1% to tokens - when combined with Bitcoin in a growth-oriented strategy - can enhance overall returns without significantly increasing risk. By experimenting with various portfolio setups, 21Shares discovered that adding Bitcoin and Dogecoin to the traditional 60/40 stock-bond mix increased the average annual return from 7.25% to nearly 9%. Risk-adjusted performance has also improved, with a higher Sharpe ratio and only a slight decline. The report emphasizes that the key is consistent rebalancing—ideally monthly—to prevent volatility from accumulating over time. Why Dogecoin? According to the company, its relatively low correlation with both traditional finance and the broader cryptocurrency market, along with its history of exceptional growth, makes it not just a speculative meme but also a truly effective diversification tool. 21Shares also made predictions about the potential price trajectory of Dogecoin in this cycle. In a cautious scenario, if this token grows by 10% annually from its 2021 high of $0.73, it could reach around $0.38 by the end of 2025—doubling its current price, but still not reaching a new record. An average estimate suggests that Dogecoin retains 3% of the cryptocurrency market share rising to 5 trillion dollars. This would bring its market capitalization to around 150 billion dollars, indicating a price of about 1 dollar. The bullish view on borrowing stems from historical growth trends. If DOGE repeats its previous compound annual growth rate of 189%—measured from the low in 2018 to the cycle bottom in 2022—it could rise as high as $1.42. That outcome would require strong retail momentum, broader utility, and deeper integration into major platforms, such as X from Elon Musk. For investors looking to adopt a structured and disciplined approach, 21Shares believes that Dogecoin may not just be a fleeting trend on the Internet but also a smart risk.