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When individuals discuss investing in cryptocurrency, they’re usually referring to Bitcoin or Ethereum. These cash have the biggest market caps, can be found on all kinds of exchanges, and have confirmed use instances.
1000’s of different cryptocurrencies can be found, although, with extra added practically each day. However not each token is created equal. Some are downright dangerous or purposefully invented to poke enjoyable on the decentralized finance (DeFi) system.
Nonetheless, generally these “meme currencies” catch on. And Dogecoin is without doubt one of the most extraordinary examples of this. It loved large progress all through 2021 and regardless of a giant cool-off in 2022, it is nonetheless one of many world’s top-15 cryptocurrencies by market cap.
On this article, we’ll clarify how one can spend money on Dogecoin when you’re . And we’ll additionally focus on the dangers and potential benefits of “investing” in meme currencies like DOGE.
What Is Dogecoin (DOGE)?
Dogecoin is a cryptocurrency created in 2013 by Jackson Palmer and Billy Markus. The 2 software program engineers designed the coin in about two hours and primarily based it on the Doge Meme.
Whereas different cryptos like Bitcoin are primarily based on a shortage mannequin, Dogecoin is not. Solely 21 billion bitcoins will ever exist and 19 million have already been mined. However there isn’t any restrict on the variety of dogecoin that may be issued. As of February 2022, about 132.7 billion dogecoins exist, with new cash mined each minute.
Not like Bitcoin and Ether, which have been created as an alternative choice to conventional currencies, Palmer and Markus designed dogecoin particularly to poke enjoyable at cryptocurrency.
But regardless of these lighthearted beginnings, dogecoin has gained recognition, in addition to some main swings upward. In 2021, r/WallStreetBets (of Gamestop fame) collectively tried to ship the foreign money “to the moon.” Round this time, Tesla founder Elon Musk additionally famously tweeted about Dogecoin, calling it “the people’s currency.”
The results of this newfound recognition is that dogecoin surged 5,000% in 2021.
This astronomical rise in worth led many common buyers to take a seat up, take discover and ask themselves, “Ought to I purchase Dogecoin?”
Earlier than we reply that query, we have to discuss meme cash.
What Is a Meme Coin?
Whereas a 5,000% acquire could seem interesting, it is important to keep in mind that Dogecoin belongs to a subset of crypto cash referred to as “meme cash.” Meme cash are joke currencies and are created for the only real function of poking enjoyable at one thing or somebody. They serve no broader function.
However we’d like greater than joke standing earlier than we write off meme cash. We additionally want to take a look at how they behave and why.
First, take into account the provision. Not like cash like Bitcoin and Tether, that are ruled by a restricted provide or backed by a standard foreign money, meme cash usually have limitless provide and new cash are added at a surprisingly quick charge. This fixed dilution of the foreign money retains the value per coin low.
Dogecoin is without doubt one of the hottest meme cash on the market. However proper now, one coin is value solely about $0.15. At its peak in April 2021, it offered for about $0.69. For comparability, one bitcoin is equal to $45,732.70 at the moment. And at its peak (additionally in April 2021) it traded at $63,729.50.
Lastly, meme cash are usually risky and topic to the whims of their group of followers (together with celebrities like Musk). This implies the foreign money can (and does) shoot up in worth or crash to new lows on a whim.
Due to its standing as a meme coin, when you’re planning to buy Dogecoin, we expect it’s best to solely accomplish that for leisure functions. Or you would attempt to commerce the coin utilizing technical evaluation to tell your entrance and exit factors. However in its present iteration, we might not advocate taking a long-term investing (HODLing) method to DOGE.
Additional studying: Find out how to Commerce Cryptocurrency
The place Can I Purchase Dogecoin?
Although DOGE is a meme coin, it is one of many greatest, and you should buy it at most main cryptocurrency exchanges. For those who’re seeking to spend money on Dogecoin, listed below are a couple of well-liked platforms the place yow will discover it:
Most crypto exchanges require documentation to show your identification. Even so, hacking is feasible. For instance, in 2019, Bitmart reported that hackers stole over $200 million in belongings from their platform throughout a breach. And there are dozens of comparable reviews about different crypto exchanges.
Because of this, we advocate retaining a big portion of your crypto belongings in a scorching pockets or chilly pockets quite than on an alternate.
For those who do resolve to speculate, ensure you’re shopping for your cash from a good supply. And do not settle for any gives of DOGE that appear too good to be true from third-party sellers.
Associated: Finest Crypto Exchanges
Ought to You Put money into Dogecoin?
When you can embody meme cash like DOGE in your portfolio, they need to make up a small portion. It could be tempting to go all in hoping that your chosen foreign money will go to the moon. However keep in mind that it might additionally — and extra simply — develop into a shitcoin and be rendered completely nugatory.
Because of this, we advocate sustaining nearly all of your crypto portfolio in mature cash like Bitcoin and Ether. You possibly can verify any coin’s market capitalization at CoinMarketCap. And keep in mind that the larger the market cap, the extra secure it’s and the much less seemingly it’s to develop into a shit coin.
In abstract, if you wish to spend money on Dogecoin, it’s best to have real looking expectations in regards to the coin’s efficiency — primarily as a result of it was created as a joke coin. In terms of investing in crypto, observe the widespread knowledge: Make investments not more than you may afford to lose. That is doubly true for joke currencies like dogecoin.
That does not imply which you can’t even be in on the joke your self. Simply do not guess your life financial savings on it.