InvestorPlace – Stock News, Stock Advice & Trading Tips
Dogecoin (CCC:DOGE-USD) is one of the most fascinating cryptocurrencies out there. Although Dogecoin was founded as a joke and had no central purpose in its creation, Dogecoin continues to gain attention.
Recently, Elon Musk and other celebrity celebrities urged their followers to check out Dogecoin. As a result of all this publicity, DOGE continues to rise. It was trading for less than a cent a coin not so long ago. Now it’s more than seven cents each. For people who bought near the 52-week low, DOGE is up more than 1,000%.
While price action is certainly encouraging, it’s still hard to see a fundamental reason for owning it. As an investment, Dogecoin lacks value. However, since people generally own it for its memetic value, the basics may not matter. So can sustained publicity and dynamism keep DOGE rising for the time being?
Dogecoin zeal continues to spread
It would be easy to dismiss the recent dogecoin excitement as the sole consequence of Elon Musk’s charisma. Musk has been one of the most famous DOGE boosters in the past few weeks. However, the excitement surrounding Dogecoin has also reached pretty unlikely places.
Consider for example Conagra (NYSE:CAG), a packaged food company. Conagra is known for things like Hunt’s Tomato Sauce, Reddi-Wip, and Vlasic Pickles. Conagra is not an innovative company. However, Conagra recently used Dogecoin for its marketing. In its recent conference call, Conagra highlighted the benefits of using Dogecoin to promote its Slim Jim meat sticks:
“For example, Slim Jim’s online community was built around memes. With this in mind, Doge and Dogecoin naturally fit our brand.
Since joining the online discussion about Dogecoin charity, we’ve used another channel for Slim Jim to connect with his community. We saw market growth in audience interaction, including direct engagement and endorsement from the person who created Dogecoin, as you can see on this slide. “
The numbers don’t lie. When a company like Conagra can get massive dedication to meat snacks with Dogecoin of all places, you know you have a phenomenon in hand. Dogecoin has certainly captured the cultural zeitgeist.
Still difficult to put together an investment case
Our Alex Sirois recently set out why the price of Dogecoin will never reach $ 10, although optimists are throwing this number away as a price target. For one, there is still no real use case for Dogecoin. The project was created as a hoax. One of the developers at Dogecoin now even regrets that it has evolved into what he sees as a vehicle for pump-and-dump trading instead of just being some fun.
Yes, there are now some places to spend Doge, such as Dallas Mavericks basketball game tickets. However, Mark Cuban, the team’s owner, appears to be accepting Doge as a stunt rather than a long-term proposition about Dogecoin’s potential worth.
At $ 10 per coin, Dogecoin would have a market cap of more than $ 1 trillion. Right now, only four American companies are worth that much. Even ether (CCC:ETH-USD), the clear number 2 in the crypto industry, is now worth just $ 250 billion. The idea that Dogecoin will surpass that number many times over seems completely ridiculous.
The fact that DOGE can soar with such wild price targets speaks for the general speculative mood. It’s hard to evaluate Dogecoin on any economic basis as the project shouldn’t do much other than be a fun change of pace. Dogecoin has surpassed all the wildest dreams on this front.
I love Dogecoin as a meme. It’s a lot of fun and the positive atmosphere is nice. It certainly stands out from the much more jaded communities you’ll find with many other altcoins.
However, it is unclear what value Dogecoin has in the long term. It has no real functional uses aside from celebrities and companies who consider it a clever marketing gimmick.
Maybe at some point there will be a way to create value for DOGE from this. But it’s not that Dogecoin was ever thought of as a serious disruptive financial tech. Enjoy the memes, and if you want to act a little, I can’t blame you. Don’t confuse DOGE with a credible long-term investment, however.
At the time of publication, Ian Bezek had no positions (either direct or indirect) in any of the securities discussed in this article.
Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a junior analyst for Kerrisdale Capital, a $ 300 million hedge fund based in New York City. You can reach him on Twitter at @irbezek.
The Post Dogecoin: Fantastic Meme, Less Compelling as an Investment first appeared on InvestorPlace.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.