Dogecoin - invest or not?
The cryptocurrency market is constantly expanding and it offers us more and more new digital coins. In this article, we will analyze about a special cryptocurrency – Dogecoin.
When it was created, it was not considered a serious project at first. It was a joke or meme of Billy Marcus, a programmer who created the currency as a parody of other rapidly growing digital currencies. Billy created a meme symbol for his brainchild — the dog Shiba Inu, who smiles.
If you compare the technical aspect of Dogecoin with Ethereum or Bitcoin, the creation of which is the infrastructure and billions of Dollars of investment injections, and serious opportunities, we can safely say that the structure of the coin is as simple as possible.
At the same time, this currency is more environmentally friendly than Bitcoin, it does not have a limit on the issue, which makes the possibility of creating tokens less energy-intensive. In addition, this made Dogecoin even more convenient to replace the fiat currency, since the price of Dogecoin will not increase very much in the medium-term perspective.
For a long time, this crypt was not noticed, but gradually it was noticed by several commercial networks, sports and medical companies. After that, the attitude towards Dogecoin changed, and the cryptocurrency itself began to be used as a payment instrument.
The total value of Dogecoin in the spring of this year was more than $85 billion. For comparison, this figure is more than the cost of Gazprom and General Motors.
The token has a godfather-Elon Musk. He started mentioning the coin both on social media and on various TV shows. The owner of Tesla praised Dogecoin in various ways, called its strengths, and this was the reason that the coin began to grow significantly. However, Elon Musk allowed this currency not only to grow, his messages on Twitter also influenced its fall. So, on May 9, Musk once again spoke about Dogecoin, and the coin fell by thirty percent. And, although this decline has not really changed the situation with the value of the coin, the current price continues to grow and has already exceeded more than a hundred times the value of the beginning of the year.
The coin increased its value by more than twenty percent after the Coinbase cryptocurrency exchange listed it on its trading platform. The placement of Dogecoin on Coinbase Global allows many possible investors around the world to conduct token trading. Those users who have Coinbase Pro accounts can trade Dogecoin for US currency, Euro, Pound sterling, BTC, and Tether. When this became known, the value of the cryptocurrency increased from $0.31 to $0.38.
Do I need to invest in Dogecoin
If you bought Dogecoin for one thousand in January of this year, then now you can have about 85 thousand Dollars. This digital currency is very unpredictable, so it is not known what limit its value can reach. But it is precisely because of this volatility that it deserves special attention. If you are lucky, you can potentially make good money by investing now.
Keep in mind that the hope that this meme currency will definitely be a reliable and long-term investment is very small. And if you decide to buy Dogecoin, it is better to treat this investment as an experiment. Invest as much money as you allow yourself to lose and do not expect much from this coin. For you, it should be primarily a speculative asset with potential for growth.
To successfully trade this coin, you need to first subscribe to Elon Musk's tweets. Although the Tesla boss is interested in Dogecoin, the digital currency is likely to show good growth.
Why not invest in Dogecoin?
There are two aspects that you should consider when thinking about buying this coin or be very careful when trading.
In fact, it is not as strong as other coins.
Now there are several types of digital currencies that are similar in structure and purpose. However, investing in Dogecoin is very different from other, established coins such as Bitcoin. Dogecoin was created in 2013, and although the coin has grown since then, it still doesn't have the same strength as other crypto assets.
So, one of the reasons to invest in BTC is a small number of coins, the number of which is no more than 21 million. This limited number of bitcoins affects the growth in value. No wonder many experts called BTC "digital gold", because the asset is limited, as well as precious metals.
At the same time, the brainchild of Billy Marcus has 129 billion tokens in circulation, and this automatically affects the price reduction. With so many more available coins, the value is low.
In addition, there are not many businesses that accept this cryptocurrency as a means to pay for their products and services. Among all those who interact with it, they may prefer to accept bitcoin rather than Dodgecoin. Without the widespread adoption of Dogecoin, it will be difficult to achieve a steady growing result.
There is also nothing special that sets Dogecoin apart from its competitors. For example, BTC has the most recognition, which makes the coin profitable in the digital currency market. Ethereum is the second digital currency after Bitcoin, and its creation technology is used for non-exchangeable coins (NFT). This allowed the use of Ethereum outside of the cryptocurrency space. As you can see, Dogecoin has no special qualities, without which this coin will be difficult to grow in the long term.
Apart from the fact that the coin is supported by celebrities and electronic hype, there is nothing behind this meme currency that would guarantee a profit. All that we are now seeing are indirect signs that point to a bubble that will definitely burst at some point.
Dogecoin is very similar to businesses such as GameStop and AMC, whose securities have soared in the blink of an eye, and their activities do not justify such an increase.
As with GameStop and AMC, the increase in Dogecoin can be artificial, which is largely influenced by Elon Musk's comments that promote the coin on social media. And, as with GameStop and AMC, the fall of Dogecoin is probably only a matter of time.
Buy or not?
So, as the forecast shows, an increase in the price of Dogecoin is expected soon. Experts expect that in 2022, this digital currency will double to $0.72. In addition, it is possible that Dogecoin will reach a record level of $2.09.
According to the short-term forecast of Digital Coin Price, in June the token will grow to $0.67. The average cost of the asset, which is expected in July, is $0.61. Dogecoin is projected to remain around $0.59-0.60 in August and September.