Meme coins have raised a lot of attention, and at this point, one thing is sure: they are here to stay. Dogecoin is the leading meme coin – launched in 2013- and eleven years later from its inception, it is still alive, with a vibrant community that supports it. Although Dogecoin had an exceptional performance at times, in recent months, it has had a bumpy ride, so naturally, you may wonder whether it’s still a good idea to add this digital asset to your crypto investment portfolio. The thing about Dogecoin is that it can be incredibly volatile, and it carries certain risks, so before getting on board with it, it’s essential to understand the asset first so you can make an informed decision.
History And Tokenomics Of Dogecoin
Dogecoin started as a joke, as you can see on the official website of the asset itself. The founders of the project – Jackson Palmer and Billy Markus- believed that crypto was taken too seriously and was overdue for some laughs, so they decided to create a new altcoin to change that and drew inspiration from the popular meme of the Shiba Inu dog. While it only took two hours to develop Dogecoin, the technology behind it is just as legitimate as that of other crypto assets. Dogecoin is an open-source fork of Luckycoin, a fork of Litecoin- which was forked off Bitcoin. Dogecoin relies on the same underlying code as Litecoin; however, it has some alterations, like increased block confirmation speeds that decreased the transactions’ time frame of Dogecoin from 2.5 minutes to only 1 minute.
Furthermore, it relies on the PoW consensus algorithm, but it stands apart from other PoW tokens through the hashing algorithm known as Scrypt, which is more power-efficient and delivers faster transactions. Interestingly, the question of whether it is worth investing in Dogecoin was never on its creators’ minds, but another kind of fate awaited the asset, as tons of people decided for themselves that it was indeed a good idea to buy it. So, less than two weeks after it was released, the value of Dogecoin increased by 300% in less than 72 hours, and the official website achieved more than a million visitors within just a month.
This moment of glory didn’t last long, as a crash followed, and three days later, the price of Dogecoin declined by 80%. But of course, that wasn’t the end of it, as throughout the years, Dogecoin continued to fluctuate, experiencing a few more crashes and bull runs.
Dogecoin’s Use Cases
When discussing whether or not to invest in Dogecoin, its use cases also need to be considered. Initially, Dogecoin’s purpose was satire compared to any practical applications of other cryptocurrencies, but thanks to the mainstream attention that meme coins received from influential figures such as Elon Musk, it has transcended its novelty status to a certain extent.
So, you can use Dogecoin as a payment method in different stores that accept it. While Bitcoin is undoubtedly the winner when it comes to availability, many retailers and online businesses are increasingly embracing altcoins as well, so if you’re in luck, you may find Dogecoin on the list. Moreover, like other crypto assets, Dogecoin has had a smoother journey in the non-profit area, as thanks to its passionate community, it has been widely used as a means to support charities. One notable case was the team’s sponsorship of the Jamaican bobsled trip to the Sochi Winster Olympics, which happened in 2014. According to some, this fact alone is proof that Dogecoin is worth it.
Should You Buy Dogecoin?
There is no straightforward answer to this question, as with any other cryptocurrency, it depends on different factors. Do you see any value in buying Dogecoin? Can you stomach the volatility it involves? If you answer “yes” to these questions, you may want to add Dogecoin to your investment portfolio. According to some market analysts, a bullish scenario isn’t necessarily out of the question for the leading meme coin, and it may even be possible for it to reach new all-time highs. It looks like whales are beginning to support Dogecoin, which could mean that its price will move up as well. At the time of writing, the overall market looks good for Dogecoin, so there are reasons to be optimistic about its future performance.
However, remember that there are no guarantees when it comes to the performance of cryptocurrencies. This is why you need to adopt the best practices when investing in Dogecoin. First and foremost, doing your research will save you lots of frustration and potential losses, so make sure to follow reliable industry news sources and keep an eye on industry trends and price predictions for Dogecoin. Moreover, don’t ignore the importance of a diversified portfolio.
Since Dogecoin is a volatile asset, and its value can swing wildly in just a few minutes, it’s essential to ensure you won’t suffer any devastating losses, and you can do that by spreading risk across different assets. That way, if the price of a crypto drops considerably, the assets unaffected by the price drop can minimize the losses and offer stability. To diversify your portfolio, consider choosing assets with different risk profiles: in general, assets with a low market cap have a higher risk. Your risk profile will determine what assets are most suited for your portfolio, so take the time to assess it before you start working on building a portfolio. And, of course, never invest more money than you can afford to lose. If your portfolio keeps you up at night, tossing and turning in bed because you’re too worried, that’s a sign something is not right. Your positions should never cause serious financial consequences, so be smart about your investment decisions.
The Bottom Line
Throughout the decade after its launch, Dogecoin has established itself as one of the most recognizable meme coins. It has equally seen crashes and bull runs and marked the beginning of the meme coin era for the crypto landscape. While it still remains popular, it’s hard to say with precision how Dogecoin will fare in the near future, as is the case with all other cryptocurrencies. Our advice is to stay educated and have a robust investing strategy in place if you decide to buy Dogecoin, making it a priority to minimize losses and maximize profits as much as possible.
