Earlier this week, someone came up to me in the coworking space that I am currently working from and asked me how to buy Dogecoin. Mind you, they have never bought bitcoin or any other cryptocurrency in the past. And this was not the only time I was asked about Dogecoin in the last few weeks.
So it’s time to talk about it.
I would be surprised if you haven’t heard about Dogecoin in the media or on social media in the last few months.
Since Elon Musk started to regularly tweet about his affection for the meme coin, the price of $DOGE has started to skyrocket.
Since the start of the year, the price of $DOGE has increased by 13,336.58%.
Yup, that’s a lot! 😮
Here’s the DOGE/USD chart to show you what that looks like.
Ok, so if you had bought Dogecoin last year, you would have done very well for yourself.
But what about buying it now? Let’s talk about that!
Dogecoin is a meme-based cryptocurrency that was created by two software developers in 2013. It quickly developed a vibrant online community that promoted the coin as a fun alternative to Bitcoin for social media tipping.
Dogecoin has managed to remain one of the largest cryptocurrencies by market cap throughout its history. Much of this success, in my opinion, can be attributed to the fact that - unlike bitcoin - it can still be mined by small, at-home mining operations thanks to its mining algorithm plus the fun factor of a meme coin that has made it hard to hate on DOGE.
In terms of actual use cases beyond being a mining coin, however, I don’t see many.
May 4th 2021
What’s more, there has been next to know real-world adoption of the digital currency, and that is what Dogecoin is supposed to be.
Because Elon Musk keeps tweeting about it and enough people believe that they will get rich because his tweet will keep pushing up the price.
Buying a cryptocurrency that is being “pumped” by one of the most influential people in the world is not entirely crazy. I mean, so far, it has definitely worked. 😀
But here’s the catch:
If you were to buy Dogecoin now and the price continues to go up, do you really think you will sell it before the price tanks?
That’s the core issue with all the altcoin craziness in the crypto markets. They are - for the most part - highly speculative “investments” that can very easily blow up in your face.
Unless you are knee-deep in the crypto markets and spend most of your day following it, the chance of you exiting your Dogecoin position at the top is close to zero.
Or do you really think that Dogecoin is more valuable than SpaceX or Honda? Because that’s what its market capitalization suggests.
I think you can see where I am going with this.
Investing in “meme stocks” (like GameStop), “meme coins” like DOGE, or pretty much any cryptocurrency (that’s not bitcoin) is essentially gambling.
Don’t get me wrong. Gambling is fun, and taking risky bets in the capital markets or crypto markets can be a lot of fun too, but it’s definitely not a sound investment approach. In fact, it’s not investing at all.
If you want to make a sound investment in cryptocurrency, buy bitcoin.
Having said all that, if you still want to go ahead and buy some DOGE, knock yourself out. Just be aware of the fact that sooner than later, its price will likely tank and you will have to make sure you get out before you make serious losses.
Share A Little Bit of Anarchy by Alex Lielacher
Peace, love & anarchy,
DISCLAIMER: This is not financial advice and for entertainment purposes only.
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