Is It Too Late To Buy Dogecoin? (The Facts)


Dogecoin had a significant dip back in December 2021 that made investing in it look pretty hopeless, but now it looks like it’s taking a positive turn, but is it really too late to invest in something like Dogecoin?

Although several reliable sources have hopeful predictions for the future value of Dogecoin, the nature of Dogecoin, its current software construction, and the lack of inflation inhibitors prevent it from being a safe major investment.

Keep reading if you’re interested in knowing about recent updates in Dogecoin’s value, current predictions, and the volatility of Dogecoin.

Is it Too Late to Buy Dogecoin?

At the time this article was written, the value of Dogecoin raised 14%, giving great hope to investors, especially those who bought back in December of 2021 when the value of a dogecoin was $0.17.

Where did the spike come from? According to MSN, the hope in the question “does Dogecoin have a future?” came after Ethereum prices raised following the announcement of its upcoming September merge.

It may not seem very hopeful right now as Dogecoin is only valued at about $0.08 per coin, but if the trend continues with Dogecoin, there might be some potential for today’s investors to make a thoughtful ROI.

Is Dogecoin Still a Good Investment?

It’s important to recognize that Dogecoin has problems that were part of its creation that don’t support the idea that it’s a good investment.

Firstly, it started as a joke back in 2013, even though it does have its own blockchain. It wasn’t until retail investors in 2021 that it started accruing meaningful value. In other words, its value comes from the community that supports it.

Secondly, it doesn’t have a supply cap. Caps impact the long-term value of a cryptocurrency by preventing minors from accumulating unlimited rewards. At that point, they would only collect transaction fees. A miner is someone who cracks complicated mathematical equations, allowing them to authorize a transaction and earn cryptocurrency.

Thirdly, its value can fall more easily than other cryptocurrencies. It has been called a pump-and-dump scheme because multitudes of miners will mine for the coins when the price rises and move the coin to a crypto exchange for other investors to buy, causing the price to drop.

Lastly, it’s highly unlikely Dogecoin will ever reach a value of $10, or even $1! We’ve talked all about the reasons why in our article here if you would like to educate yourself more.

Is Dogecoin Volatile?

Dogecoin is a highly volatile cryptocurrency!

The value of Dogecoin changes from moment to moment to the point where you might check its value now, check it thirty minutes later to find it dropped 10%, and then check again half an hour after that to find it rose 2%.

Volatility is nothing new to the world of crypto, and even traditional forms of investing, such as stocks, have always had an element of volatility. But Dogecoin is significantly more volatile than the average crypto. Why is that?

Because its value comes from the support of the community, its value is much more volatile than most other investments. There’s no utility in using Dogecoin, so if everyone lost interest in Dogecoin its value would drop completely.

This highly volatile nature of Dogecoin makes it riskier for investors and potential investors than most cryptocurrencies. There is hardly anything keeping Dogecoin’s value up. We can’t blame the makers of Dogecoin – Billy Markus and Jackson Palmer – for this. After all, we have to remember that they had no idea their meme coins would actually become popular.

How Did Dogecoin Become Valuable?

The main reason Dogecoin spiked in value at all was when Elon Musk went in on the joke in 2021, and then the community that follows him followed suit. There wasn’t any deception in these purchases though.

Mr. Musk very openly said he preferred to buy Doge over more reliable cryptos because, “Doge has dogs & memes, whereas the others do not.” Then he asked his followers to contribute to Doge. Once the value of Dogecoin spiked after that, other investors began to think Dogecoin had long-term value and joined the party.

It also helped that the transaction fee with dogecoin was and is so much lower than with the others at $0.01, and the transaction speed is significantly faster.

What does this mean for Dogecoin’s future? If we’re still wondering “is it too late to buy Dogecoin?” the answer is still no, it isn’t. However, according to the University of Ottawa and their EGARCH(1,1) model, cryptocurrencies such as Dogecoin are easily influenced by even the days of the week.

Does Dogecoin Have a Future?

So does Dogecoin have a future? According to EAI, their unique model shows promising future prices of Dogecoin. We did list several reasons why dogecoin probably won’t have much of a future, but this doesn’t mean Dogecoin is all bad.

After all, you never want to put all your eggs in one basket, and Dogecoin does add variety to your portfolio. On the other hand, there are 4,000 other listed cryptos you can diversify your portfolio with.

One thing to remember about crypto is that the software can be updated much more easily than traditional banking systems, making the growth of crypto a little more organic (ironically). In other words, someday it may have a supply cap.

Does this mean Dogecoin can compete with other cryptocurrencies, like Bitcoin? While the world of crypto can create opportunities suddenly, we would say Doge will never be able to compete.

Conclusion

While I’m no expert, my advice would be for you not to invest to much money in Dogecoin. No one knows for sure what will happen to the prices of these meme coins, so if you want to invest a small amount (less than a few hundred dollars), then there probably isn’t any harm in that – that’s what I’ve done.

But I think its pretty commonly known that investing a large portion, or even a small portion of your investments into something like DOGE is not a smart move.

Geek, out.

Noel

Noel is the founder and main contributor for his blog - Noel's passion for personal finance has helped him amass over 600k readers to his Financial Geek blog.

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