What is Dogecoin?
Dogecoin is a type of cryptocurrency used as an alternative to international currencies. Crypto currencies are used in place of a national currency which has the ability to unify nations. For example, some arcades such as Dave and Buster’s would have you convert your cash to their coin or point system when entering. Just as arcades…with cryptocurrency, you can only use it where it is accepted. Dogecoins was originally created December 6, 2013 by an IBM programmer Billy Markus and Adobe Marketer Jackson Palmer. It has lived beneath expectations until now. Largely because it was created as a joke. Dogecoin is currently popularly accepted in the entertainment industry, for tipping, social media and content creators… i.e artists.
Should you invest?
Technically speaking, as of now, there is no reason to believe Dogecoin will supersede other popular crypto’s such as Bitcoin or Litecoin…But that doesn’t mean there isn’t money to be made.
Dogecoin may be a short-term buy. Though it is a popular trend now, factual numbers suggests that Dogecoin will struggle to retain value long- term. Here’s why. There are a fixed amount of 21 million Bitcoins available in circulation evaluated at $62,000 each. There are 129 billion Dogecoins in circulation and the creators are willing to add more. It will take an increase in demand of 6,142% to equate the price of Bitcoin. If creators continue to make more Dogecoins, the price will continue to go down. This is called diluting shares (in stocks). It’s the “limited” items effect. Example, when Lamborghini makes a limited edition make and model of a vehicle…the price will steadily increase as less new vehicles become available. Much of what is driving the price of Dogecoin is simply Supply and Demand by word of mouth at this time.
Utility.
Dogecoin will have to find more utility or build a niche if it is going to survive as a digital currency. Perhaps, if it became the preferred currency for concerts, social media, or entertainment events…that would be a specific use and industry of which you could measure and make sound investment decisions. Will Dogecoin remain standing after the trend fades and fueled tweets by Elon Musk end?
Crypto Market
The crypto currency market itself, is NOT the most secure investment in the world. Crypto is not regulated in many countries or federally in the United States. Regulation is what makes an asset… a security. The Security Exchange Commission has all sorts of measures in place to stop a stock asset from flatlining.
For example, when GameStop’s (GME) stock skyrocketed off of a simple demand increase from a Reddit forum…the SEC halted trading and investigated the fluctuation. Contrary to popular belief, that was done to protect consumers. It was NOT to stop the folks buying in at $20 per share or below.. it was done to stop the Ponzi scheme effect of the little guys who buy in at $320 per share thinking that the increase will last forever. It was done to protect “the last people to the “party” so to speak. WHAT GO’s UP… for no reason… MUST COME DOWN.
My Thoughts
Lastly, trends can make you money too, however be safe and wise. Dogecoin should only be a small percentage of your portfolio… it is NOT guaranteed. I am not saying “Not to buy Dogecoin”. I’m saying, “Be wise as you’re making decisions as the trend progresses.” I am Not even saying Dogecoin won’t gain more and more value over time. The Crypto market is an unchartered territory. There will always be another coin. My advice is… Know when to buy and know when to get out! Make your money… take profits and live to do it again! Interested in other types of cryptocurrency? Here’s my thoughts on Bitcoin!