Should You Invest in Dogecoin?
Here’s what you need to know before diving into DOGE
Should Dogecoin be a part of your investing strategy? My short answer is no. But I’ll explain what it is and why it has been so popular so you can make an informed decision.
**I am not a financial advisor and this is not legal investing advice**
The financial world has been pretty interesting lately to say the least.
Lot of questions have been coming up about the stock market and cryptocurrency. Questions like:
- What do I invest in?
- When do I invest?
- How long do I hold/when do I sell?
I wrote an article recently about the investing craze around Gamestop (GME) and exactly why the stock went through the roof.
But now, a different type of currency altogether is catching headlines: Dogecoin
What is Dogecoin (DOGE)?
The short answer is: Dogecoin is a joke. This isn’t an insult. It’s the truth.
It was created in 2013 by two programmers who wanted to make a fun currency that could be used without banking fees. They used the famous “DOGE meme” as their logo and then the internet took over. People loved it and started purchasing it, even if for no other reason than to say they did.
This is the meme that captured the attention (and money) of so many:
Doesn’t this dog make you want to invest?
What Has Been Going on with Dogecoin?
Plain and simple: the power of the internet is pushing the price up.
More and more people are buying Dogecoin which, in turn, continues to push the price higher.
Reddit has been making memes about it, and Elon Musk has sent tweets that have continued to fan the flames of growth. See below.
Yes, you’re seeing this correctly. This tweet has almost 1 million Likes.
How Much Have People Been Making?
Don’t get me wrong, the cost of one Dogecoin is still around 4 cents so fanning the flames of growth is relative. However, at the time of writing this, one Dogecoin was worth $0.046. At the end of 2020, just one month ago, the price of one Dogecoin was $0.0045.
If you would have invested $1,000 into Dogecoin on the last day of 2020, your investment would have grown by 922%. Yes, this is an insane number. You would have $10,222 worth of Dogecoin at the moment.
(UPDATE: the price of Dogecoin continues to rise because of hashtags like #dogebowl around Super Bowl LV festivities. The price as of this update per Dogecoin is $0.069).
This is not because the technology is improving or the coin is being accepted at more checkouts. It is simply because the internet frenzy has more and more people buying it.
What Will Happen to Dogecoin next?
I am not a financial advisor and definitely not a fortune-teller. However, I’m entitled to an opinion, and I’m willing to go out on a limb and share it with you.
I think the Dogecoin trend will surge for another week or two and then people will lose interest like they do with so many things on the internet. Is there money to be made in the next couple weeks? Potentially. Do I see Dogecoin as a long-term investing strategy? No, I don’t.
I believe people should be investing in low-cost index funds and following the market over a long period of time.
But if you have some extra money laying around and don’t care if you lose it, by all means, throw some into DOGE.
Is Cryptocurrency Here to Stay?
I believe cryptocurrency will stick around. Blockchain technology is pretty fantastic from what I’ve read and experienced. However, Dogecoin’s popularity is more meme-based than technology based which makes me believe it won’t be one of the major players as cryptocurrency develops.
How to Buy Dogecoin
If you know the risks and potential to lose your money, but feel it is in your best interests to invest in Dogecoin, you can do so through apps like Coinbase or Robinhood (although, Robinhood has been doing some potentially shady things lately).
Download the app, connect your bank account, and purchase away.
And if you’re good at making memes, you should probably just buy a stock or cryptocurrency that isn’t all the rage and generate your own internet frenzy. Dogecoin has proven that anything is possible. Time will tell what the next big trend will be. In the meantime, I’ll be investing in the market and watching my money grow over time.
