Dogecoin has been making the news for a while now. This meme cryptocurrency has seen high growth rates in the past year, resulting in an incredible increase in its value of 3200% in 2021. This is an outstanding feat because there are numerous other cryptocurrencies out there and DOGE still managed to retain some value within that market.
Dogecoin is achieving more success than ever and the market is showing an increasing amount of confidence in it. This is a significant indicator for the market to remain positive.
Dogecoin has been making headlines in the cryptocurrency market in recent months, outperforming most of the big names. For instance, Bitcoin has increased by 300% while Ethereum has increased by 1000% in the past year. However, none of these are close to the meteoric rise seen for Doge. Doge was successful in the market, but Bitcoin didn’t see a huge surge on its own. It keeps on growing consistently.
Although the increase in value is not exclusive to Dogecoin, it has outperformed its counterparts. For someone new to the cryptocurrency market, the big question would be – is Dogecoin a good investment?
What Is Dogecoin?
For those who are new to cryptocurrencies, it is important to understand what they are and how they work. A meme featuring a Shiba Inu dog gave birth to Dogecoin, one of the many cryptocurrencies on the market.
It is also commonly referred to as a clone coin because it was based on Litecoin’s technology. The currency environment is influenced by the dog meme. Developers used a code linked with Litecoin, a fork of the Bitcoin blockchain, to create Dogecoin.
Dogecoin has an incredibly high supply but the demand is still high as people want to use it and invest in it. They still generate new coins every day and create a lot of value by providing their own mining benefits
People continue to call for a token, so the price has grown steadily in recent times. Dogecoin is paired with some USD and its market cap is about $20 billion. With more than 100 billion circulating DOGE.
Dogecoin’s Advantages
Now we are going to look at what makes Dogecoin a good investment opportunity. These are the three features that you should focus on. Here are some of them:
Dogecoin enjoys an infinite supply
Unlike Bitcoin, which has a limited supply, Dogecoin is infinite in quantity. While its popularity may remain low, as long as there’s a demand for it and people are willing to accept it then its value will undoubtedly increase.
On the other hand, Dogecoin is referred to as a “scarce digital currency.” Its price can only increase when it becomes more difficult for people to come up with more coins. It does not depend on the world economy and has been used in many different countries. This allows its miners to make a considerable amount of doge coins every time they mine.
Decentralization
Most people associate cryptocurrency with decentralized finance, the efficiency, and the aptness it provides with its blockchain network. The availability of this system is both a main reason for people adopting this way of doing finances as well as the rapid rise in crypto prices over the last year.
One of the reasons for the popularity of Bitcoin is its decentralized system. This allows it to be held in secure and trustful ways. Leading to its popularity as a preferred cryptocurrency.
Dogecoin has a much smaller blockchain and thus a smaller global presence than Bitcoin. This decentralization is not as accessible or experienced by many users compared to the widespread ability of Bitcoin. If the lower nodes are not secured properly. Hackers will be able to steal your assets. Note that this could also expose you to a high risk of losing your assets.
Dogecoin is limited to a few wallets
This means that the price of Dogecoin is still under the control of a few people, and isn’t affected by supply and demand yet. The distribution of Dogecoin is more uneven when compared to other major cryptocurrencies like Bitcoin. 0.002% of the Dogecoin wallet controls 2/3rds of the total supply, leaving a high disparity between different levels of involvement within the network.
Why Is The Dogecoin Price Increasing?
You might be confused as to why despite all of this. The shortcomings, dogecoin’s value is increasing. Here are a few reasons:
Inflation and stimulus
Experts say that market conditions, such as inflation and stimulus, have put Dogecoin on the rise. The increase in US economic size from $15.4 trillion in February 2020 to around $20 trillion due to the stimulus packages has helped the coin to grow as an unassailable competitor. As of this writing, they can be trad for around $1 each and are gaining ground.
Increased access to crypto trading
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Influence
The availability of apps and ease. Which can be used to manage finances and has further boosted the cryptocurrency’s acceptance. Younger users are also becoming more influential in online discussions, especially on Reddit. Popular opinion on the trader and investor choices also influences the crypto sphere. Accordingly, if it does well, there is a chance that it will draw more attention from traders and investors.
In addition, the performance of cryptocurrencies can also lead to better interest. If a cryptocurrency has a good performance, many people will want to invest.
It may be possible that many consumers are aware of the reported issues. With Dogecoin, they are still interested in it. Even though there are some unpredicted factors about the coin, it has been able to find positive stories about its market performance. A surge in investors and traders has led to the growth of Dogecoin as its value increases. You can also find it available on exchanges.
Though celebrity endorsement doesn’t necessarily mean that Dogecoin will always succeed, it has been helpful in the past. For example, when Elon Musk tweeted about DOGE and made people interested – including those who trade and invest in new coins. Other celebrities have also endorsed the token, such as Snoop Dogg. When celebrities endorse a project, the interest in that project increases and so does its value.
Is It Risky To Invest In Dogecoin?
Most Dogecoin investors agree with that. There is risk involved in investing in DOGE, but for those who are content with the relatively low investment amount, it’s a good option. As with other investments, trading and speculating on Dogecoin has been rewarding to people.
Like any other asset, it’s important to exercise caution when investing in a token. Even tokens performing well now might not continue doing so in the future.
Cryptocurrencies sometimes have a lot of volatility. The Crypto market can fluctuate like any other market and the prices will rise and fall. However, caution is necessary before investing in Dogecoin.
You should definitely take that into account when investing, but there are coins out there with a proven track record that are just as popular and offer similar returns. Investors feel comfortable buying Dogecoin and Bitcoin because both coins have long histories.
Although not as popular as Bitcoin, Dogecoin has seen significant growth in the last year. It achieved peak performance in mid-April of 2018 and was selling for $65,000 per token. Ethereum has seen its strongest point of growth many months ago and is currently trading at $380.
The cryptocurrency, Dogecoin, peaked in November of 2017 before descending significantly in the following months. It was an affordable investment because anyone could buy some Dogecoin tokens and do transactions.
Investing In Dogecoin
You might be tempted to invest in Dogecoin, but you should first research on. What the current situation is, and think about the future possibilities. Before you select a vendor for your business, consider all the relevant factors so you don’t go by just one factor.
Conclusion
Dogecoin is a Cryptocurrency with a huge market cap that also has many investors excited about it. The underlying technology, as well as the cultural appeal, have made it attractive for people in the crypto sector.
You can buy Dogecoin and be a part of the crypto market to earn some profits. However, you should base your decision to make a long-term investment with Dogecoin on the information available to you and after considering the associated risks. Experts can offer their opinion on whether or not an investment will be worth it.