Dogecoin Today: Can You Still Get Rich off DOGE?
What if you had a chance to get rich and let it pass without doing anything? Many who didn’t invest in Bitcoin early on are full of regrets as that coin has skyrocketed in value. And recently, meme coins like DOGE have gotten more popular, allowing some lucky few to get wealthy from their savvy crypto investments.
But is that likely to happen to you? And is DOGE a viable investment? Keep reading to learn everything you need to know about Dogecoin today!
What Is Dogecoin?
Our guide is designed to help you learn everything you need to know about Dogecoin today. First, though, we need to start with the basics. And that includes answering the simple question: what is DOGE, exactly?
On the most basic level, DOGE is a form of cryptocurrency. It has a lot in common with the most famous crypto, Bitcoin, but many fundamental differences.
Perhaps the most exciting thing about DOGE is that it began in 2013 as a spoof of Bitcoin. As part of the joke, Dogecoin has unlimited potential coins, producing about five billion more coins each year.
You might expect unlimited production to dilute the brand and limit its value. But despite this, DOGE has only grown in popularity, especially in 2021.
Trading On a Brand
If you’re new to crypto, this is where things get confusing. If everybody is more familiar with Bitcoin, why would you invest in Dogecoin instead of Bitcoin?
There are two primary reasons for this. The first is that as Bitcoin’s value has grown, the cost of investing in it has significantly increased. Meanwhile, despite its rise in popularity, you can still buy individual Doge coins for less than a quarter at the time of this writing.
In addition to being easier to invest in, DOGE is what’s known as a “meme coin.” That’s exactly what it sounds like: a type of cryptocurrency based on a popular internet meme. In this case, Dogecoin is based on…well…Dogecoin, everyone’s favorite Shiba Inu meme from yesteryear.
That brings us to the second reason to invest in DOGE: brand recognition. Meme coin makers count on public familiarity with the meme in question. There is no meme more popular than Dogecoin. That’s one of the reasons you can make DOGE transactions at a growing number of convenient ATMs.
Why Some Are Skeptical Of Dogecoin?
So far, this all sounds good. Dogecoin is both easy to invest in and has grown significantly in value. And everyone seems to know at least one guy who claims he got rich off investing in Dogecoin.
Why, then, are some people so skeptical of DOGE? The short answer is that even in the ever-changing world of cryptocurrency, DOGE is famous for being incredibly volatile.
Let’s put this in perspective: at the beginning of 2021, Dogecoin sold for about $0.004 per coin. By early May, it increased to about $0.68 per coin. So far, so good.
However, by the end of May, DOGE was down to about $0.30 per coin. And by the end of 2021, Doge was only worth about $0.18 per coin.
As you can tell, the Dogecoin price history is full of ups and downs. Could you have been one of the people who bought Dogecoin for a fraction of a penny and then sold each coin for nearly a 17,000% markup? Sure, maybe.
But you could have just as quickly been someone who saw Bitcoin rise in popularity and bought a bunch of coins at $0.68 apiece. Instead, by the end of the year, you’d watch your increasements decrease in value by a discouraging 75%. As always, your potential success as an investor comes down to your ability and your willingness to buy and sell at the right time.
Why Is DOGE So Hot Now?
DOGE may be incredibly volatile, but nobody can deny that this 2013-era meme coin had a meteoric rise in popularity in 2021. That brings us to another simple question: “Why is Dogecoin today so damned hot compared to Dogecoin in years past?”
Part of it is the philosophy that “a rising tide lifts all boats.” Standard interest rates are so low that many turn to various investments to grow their wealth, increasing interest in Bitcoin. This interest leads to greater interest in other cryptocurrencies. Many new digital currency investors hope to get in on the ground floor of an altcoin that might grow in popularity.
Once the COVID-19 pandemic set in, millions worldwide felt functionally stuck inside their homes with little to do. So seeking both new challenges and new hobbies, many turned to cryptocurrency like Dogecoin. Quarantined and scrolling the web, these investors visited the internet more than ever. Soon, many would come to discover the friendly DOGE investment communities fatefully. Here, they could meet other prominent crypto tastemakers like Elon Musk (more on him later).
But to understand the popularity of Doge, you need to know how it relates to the most unexpected stock investment of all: Gamestop.
How Dogecoin Relates To Other Investments
In 2021, prominent companies such as Citron Research and Melvin Capital were short-selling the beleaguered video game retailer Gamestop. If you don’t already know, short-selling is how an individual or a company can effectively make money off of a company’s failures rather than its successes.
These short-selling practices mentioned above led many internet users (particularly the r/WallStreetBets guys over on Reddit). The idea was simple: their collective investments would cause the stock value to rise. And this had the potential to make average investors potentially rich while sending a message to traditional Wall Street investment firms.
What, you may ask, does all of this have to do with Dogecoin? Basically, the Gamestop thing ignited a severe passion for many investors when they realized how much of a difference a single investment could make—resulting in hoards of hopeful investors sinking money into other seemingly lost causes, including the AMC chain of movie theaters.
In the frenzy of the public investing in different things in an attempt to go “to the moon” (the hopeful terminology used by Gamestop investors), many began investing in DOGE. Naturally, this slew of investments would send its values higher and higher. But, ultimately, it’s not a coincidence that the ebbing and flowing of Dogecoin’s value stuck to the ups and downs of Gamestop and other seemingly underdog investment opportunities.
Changing Ideas About Value
If you’re relatively new to crypto, the whole idea of “value” probably seems pretty abstract. After all, when you have a U.S. dollar, you have a tangible form of currency with a defined value. But when you have a Dogecoin or other kind of cryptocurrency, you have an intangible purchase whose value is driven purely by speculation.
And that’s the real double-edged sword of DOGE investment. The strength or weakness of this meme coin is relative and can change at different times. That’s why Dogecoin’s value rose and fell so much throughout 2021: the value matched different attitudes towards the long-term viability of crypto in general and Dogecoin in particular.
That may sound discouraging to a new crypto investor, but keep in mind that this isn’t too dissimilar to other investments such as stocks. Gamestop didn’t magically become a better company overnight, but consumer investments led to consumer confidence.
Whether you can eventually get rich off Dogecoin depends on consumers’ confidence in this cryptocurrency. And to figure out how secure you are in DOGE, let’s take a closer look at the pros and cons of investing in it.
Dogecoin Today: The Benefits For Investors
Dogecoin is decentralized like all cryptocurrency is. Many who see crypto as the future love the privacy and potential of decentralization.
As we noted before, Dogecoin has a small army of online supporters. Whether you are new to crypto in general or DOGE in particular, you will find a community of people willing to help you learn, invest, and maybe even profit.
Finally, Dogecoin is recognizable enough to be accepted as currency in thousands of places worldwide. That may not seem like a big deal, but many newer types of crypto are much less easily spent. Unlike many other meme coins, DOGE is a currency you can invest in and spend.
Dogecoin Today: The Drawbacks For Investors
As great as Dogecoin is, it has its share of cons. Perhaps the biggest drawback is the volatility we covered earlier. While some people love the idea of day trading and potentially making a big profit, many other investors would prefer a more stable investment for their hard-earned cash.
Also, do you remember when we said that Dogecoin began as a spoof and has an unlimited amount of future coins? Well, this means that DOGE coins are likely to be valued less and less on a long enough timeline.
Finally, Dogecoin is simply less versatile than other Bitcoin alternatives such as Litecoin. So, while DOGE works well for making the occasional digital purchase, it doesn’t have the transactional flexibility of certain other coins that are used, traded, and trusted more than Doge. But at least you can use Doge to tithe to a very forward-thinking church!
And that brings us to one man who is perhaps a walking pro and con for Doge: Elon Musk.
Elon Musk: The Wild Card
Elon Musk is currently the world’s richest man. He is also one of the most-watched men Tweeters globally, trading barbs with senators and anonymous users on Twitter. (when he’s not tweeting about strange internet memes).
And nobody has had such an outsized influence on the value of Dogecoin that Musk. Towards the end of 2020, he tweeted “One word: DOGE,” causing the coin to increase in value by 20%.
A couple of months later, he tweeted things out like, “Dogecoin is the people’s crypto,” causing a pricing surge of about 40%. Then, in April, he’s tweeting out the caption “DOGE barking at the moon” caused the cryptocurrency to increase in value by more than 100%. And towards the end of 2021, his claims that Tesla fans could purchase Tesla merch with Dogecoin caused another spike in value, this time by more than 20%.
At first, this may sound like a good thing. But, if you’re going to invest in crypto, it might as well be the one that has the world’s richest man as a cheerleader…right?
However, Musk has historically been about as volatile as Dogecoin. For example, in May of 2021, his online tweets about losing passion for Bitcoin caused Bitcoin to decrease in value by 8.5%. And in mid-2021, Musk’s announcement that crypto users could no longer purchase Teslas using Bitcoin caused the entire world of cryptocurrency to lose a combined $365 billion in revenue.
Some have accused Musk of market manipulation when it comes to crypto. And back in 2018, he infamously tweeted, “Am considering taking Tesla private at $420. Funding secured.” This infamous Tweet led to an SEC investigation into whether Musk had misled investors. As a result, Musk had to step away from the Tesla board, pay a $40 million settlement, and promise to stop damaging his own company through careless tweets.
In short, one might begin to wonder; If Musk can cause so much damage to himself and his own company through a toxic Twitter habit, who knows how he might negatively impact your favorite cryptocurrency in the future?
Is Dogecoin Likely To Make You Rich?
Now we are back to the core question. Is DOGE likely to make you rich? And the short answer to this question is “probably not.”
Dogecoin has seen extraordinary short-term growth in 2021, but this was during one of our most volatile economic times. And while it’s possible for you to buy and sell at the right time and walk away wealthy, it’s far likelier that you will see your investment lose value. Especially since there will be another five billion coins released to the world each year until the end of time.
If you want to invest in crypto, we recommend other forms of crypto, including Bitcoin, Litecoin, Ethereum, or even Shiba.
Your Next Move
That’s everything you need to know about Dogecoin today. But do you know who can keep you in the loop about all things crypto in the days to come?
ByteFederal, crypto experts specialize in everything from great digital wallets to convenient crypto ATMs. To learn more about how we can help you succeed in the world of crypto, contact us today!