With a market capitalization of 63 billion US dollars, Dogecoin has just made it among the four most famous crypto coins. The coin is among the most hyped cryptocurrencies in 2021, and the DOGE wave can be seen on all social media.
Retail investors are rushing to snag a bit, but if you’re making money fast you should probably slow down, especially after learning that Dogecoin was created as a joke by a software engineer, Billy Marcus, in just 3 minutes. Though Doge started as a joke and is even commonly referred to as a meme coin, it is still a cryptocurrency.
Bitwave’s CEO believes the coin came to make fun of Bitcoin, but is now taking a different turn in 2021. Gaining over 5000% in just a few months is no joke, but let’s look at the intricacies. Here are some analogies to show that Doge may not be an excellent long-term investment.
The growth of Dogecoin
Dogecoin’s price didn’t skyrocket until early 2021. According to statistics, the coin’s growth rate seems to outperform that of Bitcoin. However, a closer look at Doge’s performance reveals a clear difference in price development. Bitcoin was the first cryptocurrency introduced by the mysterious man Satoshi Nakamoto in 2009.
The idea of blockchain technology and digital currency was pretty green. Many people did not understand cryptocurrencies, and Bitcoin was even rejected and banned because of the decentralization and volatility associated with the crypto world.
Despite these conditions, Bitcoin has seen remarkable development and still rules the crypto world. The coin was worth over $ 1,000 in 2013, the same year Billy Markus and Jackson Palmer founded Dogecoin. On the contrary, Dogecoin doesn’t even have to reach $ 1 in eight years.
Ethereum was launched about two years after Dogecoin and its growth has been monumental. Although its growth can be linked to its Ethereum blockchain, which is home to many other projects, its value is well above Dogecoin.
Both coins are among the top five largest cryptocurrencies, but Ethereum has passed the $ 4,000 mark and is still making Dogecoin seem like a joke. The internet may be excited about the coin right now, but at its pace, it’s not a long-term investment option.
DOGE could just be a joke
Dogecoin founders were just two guys who became friends because of their shared interest in cryptocurrencies. They were jealous of Bitcoin and thought the crypto industry was growing pretty seriously. They decided to create their crypto but made it funnier and friendlier. It has been a fun and friendly altcoin all along since its launch in late December 2013. It was used to reward users of social platforms like the Reddit community for good content and charity programs.
However, it’s worth noting that the Dogecoin team hasn’t made any updates or developments since 2015. On top of that, the co-founder of the coin, Markus, sold his entire Dogecoin position to purchase a motor vehicle, a used Honda Civic.
DOGE market manipulation
The current Dogecoin rally follows Elon Musk’s social media posts about the meme coin. It could just have an impact on what people believe following Musk’s views on the coin. The price of the coin fell after Musk made fun of the crypto on SNL and described Dogecoin as a “crush”. The coin traded between 60 and 70 cents but fell 40% after the show. Cryptocurrencies are known to be notoriously volatile, but it is evident that Elon Musk’s sentiments could move the Dogecoin market.
It all started in January 2021 when the Tesla CEO started tweeting about the coin. Musk became a high profile Dogecoin supporter, and this helped drive the price of the coin skyrocket. SpaceX’s CEO plans to use DOGE for its space exploration projects in 2022 and the company is already accepting DOGE as a payment option. Musk noted in one of his tweets that his space satellite project would take DOGE to the moon.
Dogecoin enthusiasts had been waiting for Musk’s positive feelings about his SNL appearance and a subsequent spike in DOGE prices. However, their expectations were not fulfilled and DOGE became devastating. It’s hard to say that given the known volatility of the crypto market, Elon Musk has a significant impact on the DOGE market, but it’s a factor not worth ignoring.
Blockchain technology presented itself as a cutting-edge technology that would guarantee the security of a revolutionary financial system with its distributed ledger network. However, the industry is still grappling with security issues and DOGE was no exception.
In 2014, Dogewallet was hacked and around 21 million Dogecoins were lost. The hack happened awkwardly on Christmas Day, but the owners were lucky enough to get a refund from the Doge community. A Dogecoin exchange called Moolah, founded in 2017, also went bankrupt at some point despite being a fraudulent exchange.
The world of cryptocurrencies is in such a loud Dogecoin buzz that the ATH of Ethereum is barely noticeable. Dogecoin hit a new ATH but collapsed after Musk’s feelings. Many retail investors may find it an excellent opportunity to invest in the coin, but nonetheless, one can never be sure in the crypto world.
Elon Musk’s support for his SpaceX project could mean a bright future for DOGE. However, if you want to invest in the long term, you should reconsider your decision based on previous performance.