Dogecoin, a cryptocurrency that has been making the news recently for its high growth rate and 7000% increase in value since 2021’s first half. In comparison with other cryptocurrencies, Dogecoin is doing extremely well which helps to consolidate investor confidence and send positive signal to market regarding future of this currency. Dogecoin is making headlines as one of the top performing cryptocurrencies in recent times. In contrast to Bitcoin and Ethereum, who have both gained by 300% – 1000%, Doge has increased its value even more at a staggering 3000%. This begs the question: is investing in Dogecoin worth it?
What is Dogecoin?
Dogecoin is one of the numerous cryptocurrencies in the market. It was another clone coin that derived its name from a meme featuring a Shiba Inu dog. The currency picture also draws itself from this doggy-meme, and developers used codes from Litecoin to create Dogecoin. Dogecoin is the talk of investors with people advocating for it to be worth $1.00 per token, making its market capitalization around 75 billion dollars at a price close to one dollar USD. The 130+ billon tokens have existed since 2013 when miners are gifted 10k doges every block they solve by mining which has so far made waves in the crypto world and continues today with an additional 14 million new coins being added daily.
Features:
Dogecoin enjoys an infinite supply
Despite having an infinite supply, Dogecoin has thrived. Besides the meme culture and theoretical approach that contribute to its success, another factor is that miners make a considerable amount of doge with every block they solve. A miner or group of them earns up to 10k doge for each solved block creating more incentive in mining it rather than Bitcoin which offers finite resources thus requiring people to purchase their own hardware instead using other forms including cloud-based ones like Amazon Web Service.
Dogecoin is limited to a few wallets
A small portion of the Dogecoin wallet controls a majority of its supply. This means that price is under control from select few people who have access to most coins. Currently, only 0.002% of the wallets hold up two thirds or more which makes it highly uneven compared to cryptocurrencies like Bitcoin.
Decentralization
The blockchain network is decentralized, which means that it does not rely on a single system or entity to function. Due to this decentralization in the financial sector, many people are buying into cryptocurrencies like Bitcoin and Ethereum due their safety and reliability. One of the reasons why more individuals choose cryptocurrency over fiat currency is because they prefer using an efficient payment method without any middlemen involved; hence making these transactions secure with no need for trust between two parties when doing business together.
Dogecoin’s decentralization system does not measure up to that of Bitcoin because the latter has almost 10,000 nodes accessible in over 97 countries, while the former has only 1090 nodes. The lower nodes make it susceptible to attacks, which, if happens, will expose the users to the risk of losing their assets.
What do the value of Dogecoin Rising?
Inflation and stimulus
Dogecoin has seen an increase in value thanks to inflation and stimulus packages. Experts predict that the US economy will rise from $15 trillion this year to around $20 trillion by 2020 due to these policies, allowing Dogecoin’s demand as a safe haven investment opportunity to grow with it.
Influence
The rise of Dogecoin can also be attributed to the availability and accessibility of finance apps. Many young people use applications like Robinhood, which is why they have turned influencers in certain forums such as Reddit. It’s believed that popular opinion amongst traders and investors influences what becomes successful within the crypto sphere; if one coin does well it will likely attract attention from many other groups involved with trading or investing cryptocurrencies.
Celebrities have also been known to endorse Dogecoin. For example, when Elon Musk tweeted about the coin in December of 2017, it helped increase its value by a significant amount. This is because traders and crypto enthusiasts alike were impressed with his endorsement which drove up interest for the token itself. Other celebrities who have endorsed this digital currency include Snoop Dogg and others like him including former football player Luis Suarez from Barcelona FC! Because they are well-respected figures within their industries, their endorsements can drive volume towards other cryptocurrencies as well such as Bitcoin.
Increased access to crypto trading
New technological advancements have made it easier for anyone to trade in cryptocurrency. For instance, retail brokerage platforms allow people with smartphones and internet access to invest without commission fees. With these developments, investing has become more accessible than ever before.
Is Dogecoin a risky investment?
Like any other investment, Dogecoin also has its share of risk. Although it has been the talk of investors, traders, and crypto enthusiasts due to its impressive returns, you should not blindly enter into the trade. Like any other trade, you have to exercise due diligence and caution. Even if a token is doing exceptionally well at present, there is no guarantee that it will continue to do so in the future too.
However, although not as big as these two, Dogecoin is a significant investment due to several factors. In mid-April, when Bitcoin recorded a peak performance, it sold for $65,000 per token while Ethereum had a peak performance in mid-May when it sold for $4,000 for a token. In the corresponding period, Dogecoin recorded a high performance where it sold for $0.68. This considerable price difference meant that Dogecoin was a very affordable investment as anyone could buy some dogecoin tokens and do transactions.
Conclusion
Dogecoin has recently become extremely popular in the crypto market. This cryptocurrency is making waves due to its impressive market cap, data and predictions that indicate it will rise even further. You can invest your own Dogecoins into this market too if you want – just be sure to consider all information available before doing so.
