Is Dogecoin a Good Investment?
In 2021, the digital currency has already expanded by over 1,400 fold.
This year has seen a spike in interest in Dogecoin, a cryptocurrency created in 2013 which now has a market cap of around $9 billion, making it among the top twenty cryptocurrencies in the world.
Even though Dogecoin’s price is just about 7 cents, the coin, which trades under the term “DOGE” on an exchange, is seeing a 1,400 percent rise in 2021. The cryptocurrency, pronounced “dohj coin,” has hit the scene this year, with many celebrity fans, like Tesla CEO Elon Musk publicizing it on the way to new records.
So, what is the DOGE’s situation? Should you put money into Dogecoin? Looking at the cryptocurrency’s past, contrasting it to competitors, and evaluating the incredible development will effectively alleviate the query.
Year 2021 would be known as the Year of the Meme
“Dogecoin is a fascinating invention for investors,” said Julian Hosp, CEO, and co-founder of DeFi, a decentralized finance technology that lets people and loans out cryptocurrency in return for interest. “If you consider that Dogecoin was originally invented as a joke based on a meme,” Hosp says, “it’s amusing.” That’s right. The logo of Dogecoin is just a Shiba Inu dog who became an internet sensation humorously in 2013.
It’s not in the discussion for becoming a better store of value, unlike Bitcoin: There is over 129 billion DOGE in circulation. There is fewer than 19 million Bitcoin in circulation, with just 21 million feasible. There is no cap on the number of Dogecoin units that can be generated, and billions more will be created annually. That’s a lot of mixed theories.
The good supply may clarify how a coin that was worth approximately 35 times its price one year ago and far more than 10 times its value at the start of the year is now just worth around 7 cents. Yeah, reality, a nonsensical token will take off in 2021, a year when “meme stocks” like GameStop (GME), AMC Entertainment (AMC), and Bed Bath & Beyond (BBBY) soared in value, thanks to Reddit hype.
Determining the Value of DOGE
There are still more red flags to George Chrysochou, the investor & global head of marketing for Financer.com than DOGE’s meme status alone.
“The project is community-driven but has never received formal adoption,” Chrysochou says. “Nor an official development plan or indeed a white paper is available.
Its founder and key developers left the project in 2015, and have stated on many instances that they feel it is overrated. “And these are early implementation variables to think about.” Subjective considerations become particularly significant in cryptocurrencies, which miss the advantage of earnings expectations or dividends.
However, there are some objective methods for determining a currency’s fair value, such as assessing how it has typically been priced concerning other cryptocurrencies such as Bitcoin.
The easiest way to evaluate DOGE and BTC is to price both currencies in microunits of Bitcoin called Satoshis, or sats, which reflect one hundred millionth of a Bitcoin.
Except for mere speculative investors, a coin with scope for unauthorized dilution with source in such an internet joke is possibly not the best choice. Even if offered unintentionally by Elon Musk, publicity stunts aren’t enough to make Dogecoin a great investment.