Cryptocurrency is still in the continuum of its strong rave in the trade market and Dogecoin is not receding from remaining in the crypto spotlight. As interesting as it might. The meme-based digital currency has increased by more than 12,000% so far in 2021.
Before making a delve into investing in Dogecoin, it is noteworthy to under the nitty-gritty of what the coin is characterized by. In simple terms, Dogecoin can be described as an imitation of Bitcoin. Created in 2013, it is an Altcoin that started as a joke of cryptocurrency but the trajectory of its value has been momentarily commendable in the past year.
Having had a handy understanding of what Dogecoin is all about, we can then lens through the things to know before investing in it.
1. Volatility
Dogecoin’s high volatility is considered the first feature to understand. Over the past few months, Dogecoin has experienced remarkable price fluctuations as it rallied around an all-time high of $0.70. It later suffered a crash to around $0.45 soon after. Although the value of Dogecoin has tickled the interest of crypto enthusiasts to learn and invest in it, price crash has always been imminent as a result of an increase in the number of investors incessantly cashing out from the coin.
2. Bubble-Like Feature
Dogecoin can be broadly described as a bubble with the propensity of crashing soon. Therefore, it is much of an issue to not put into consideration the fluctuating feature of the coin which is largely dependent on how it is being held by people and also its circulation coverage across the crypto market. Deduction from the Dogecoin price graph is suggestive of Dogecoin’s price steady fluctuation, unfortunately, there is no support for the prediction. This led to people being very cautious while investing in Dogecoin due to constant cashing out that might later burst the bubble.
3. Big Influencer
Stocks and brands are not the only marketplaces that drive towards being influenced by big personalities, cryptos also do. Notable of the prominent influencer influencing Dogecoin is Tesla CEO Elon Musk. The self-acclaimed Dogefather and community dubbed Dogecoin CEO, has repeatedly tweeted about the digital currency. A large influence from Elon Musk has enabled the prices to have a surge many times. This is a litmus test to the fact that the price of Dogecoin tends to flip over to either if a popular individual could influence its price.
Following Elon Musk’s outright support for Dogecoin on his appearance on Saturday Night Live (SNL), which was expected to push the value of the coin to a near $1 mark, Dogecoin price had a sharp fall a day after his appearance on the popular show.
4. Fear Of Missing Out (FOMO)
As Dogecoin takes its marketplace to social media and its investment is munched on by people, there is the possibility of Fear Of Missing Out (FOMO) on a potential investment opportunity. Nonetheless, it is important to note that it is not everyone that will make fortune from investing in Dogecoin.
Conclusion
It is almost impossible to enmesh Dogecoin with a fundamental value due to its fast and infinite growing supply in comparison to finite cryptos like Bitcoin that are highly decentralized.
In the long run, investing in Dogecoin is largely based on conjecture, and Dogecoin price would be a culmination of social trends and influencer’s influence. There is an indication that Dogecoin will continue in its growth trajectory, albeit the risk is expensive.
