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Updated Feb. 9

Whatsoever investor with fifty-fifty a passing interest in cryptocurrency is probably wondering if they should buy Dogecoin now.

Information technology's an understandable question given that DOGE skyrocketed more than 900% in a trivial more than than 24 hours Thursday and at its peak was upwardly more than than one,400% since January. ane.

A entrada by a group of Redditor crypto investors is what drove the sudden toll movement. They want to push the Dogecoin toll to $1 from a starting point of about iii-fourths of 1 cent.

The surge temporarily launched Dogecoin into the listing of Summit 10 cryptocurrencies by market cap.

Shortly afterward Dogecoin cost fell dorsum about 46%, but trading remained extremely volatile. Over the next few days it started climbing support once again. By Feb. 8 DOGE was back up to $0.08.

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At present, the curt answer to the question "should I buy Dogecoin?" is absolutely not.

The long respond involves digging into the groundwork of this whimsical but generally frivolous cryptocurrency - and why it suddenly is back in the limelight.

Communicable Up with Dogecoin

Dogecoin is actually ane of the oldest cryptocurrencies. Jackson Palmer, production managing director with Adobe Inc. (NASDAQ: ADBE) and Billy Markus, a software developer at International Business Machines Corp. (NYSE: IBM) created Dogecoin in 2013 to satirize the early hype effectually cryptocurrencies.

They based information technology on Litecoin, itself a fork of Bitcoin. They borrowed a popular meme of the fourth dimension of a Japanese Shibu Inu canis familiaris as the official Doge logo - another choice that reflected the coincidental nature of the project.

The crypto community had fun with information technology for a while, then generally forgot most it. But Dogecoin never died. People connected trading it on crypto exchanges. New developers volunteered to maintain the code.

Then, in 2019, Dogecoin at long last started to draw attention. On April 1 the current developers ran a poll asking Doge fans who they would like to see every bit the new Doge CEO. It was all a joke; Doge, like Bitcoin, is a decentralized cryptocurrency. No one "runs" it.

Not surprisingly, Tesla, Inc. (NASDAQ: TSLA) CEO Elon Musk won the poll. Musk being Musk, he promptly added "CEO of Dogecoin" to his Twitter bio and tweeted, "Dogecoin rulz." The next 24-hour interval he changed his bio to "retired CEO of Dogecoin."

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The acknowledgement from i of tech's peak CEOs pushed the Dogecoin cost up 94% in five days.

Concluding July Dogecoin burst into the news again. In that case, a TikTok challenge aimed to get Dogecoin to $1. The campaign managed a 96% pop in the DOGE price before petering out.

Then GameStop Corp. (NYSE: GME) happened...

Why Information technology'due south a Bad Thought to Buy Dogecoin At present

Unless yous lost your Internet connexion this week, you know what happened to GameStop stock. A group of Reddit investors banded together to push upward the GameStop stock price. That in turn forced a massive short clasp on several hedge funds, which made the GME stock toll skyrocket.

Other Reddit investors in several crypto-oriented forums (known as subreddits), mainly r/CryptoCurrency and r/SatoshiStreetBets, were inspired by what they saw.

They started a thread called "Dogecoin is the adjacent GME/Bitcoin" and the game was itinerant.

The trouble they're having, of course, is that no ane is shorting Doge. It was the billions of dollars of brusque interest that forced the price of GameStop to soar. Without that goad, it's much harder to button the Dogecoin price.

Another outcome with Dogecoin is that it was designed with no cap on the supply. One reason Bitcoin is soaring is that he supply is capped at 21 million, and of that supply 18.6 bitcoins have already been mined.

Already more than 128 billion DOGE have been mined. The more the miners create, the less value each DOGE has, and the harder information technology is to push the price higher.

That's 1 reason why it's very unlikely Dogecoin will ever reach the goal of $1 per coin.

Another is something Dogecoin has in common with the GameStop madness: Nothing virtually the project makes it worth what people are paying for it. Simply every bit GameStop's fundamentals bespeak to a off-white cost much lower than $400 or $300 or $200, zilch about Dogecoin merits a 900% proceeds.

Even Markus, Dogecoin'southward creator, is alarmed.

"The idea of Dogecoin existence worth 8 cents is the same equally GameStop existence worth $325," Markus told The Wall Street Journal . "Information technology doesn't brand sense. It'southward super cool. The coin design was absurd."

Doge's only existent use case is for online tipping. And just about whatsoever cryptocurrency is capable of that.

Sure, Dogecoin a fun crypto and a slap-up meme. Simply trust me, y'all don't desire to purchase Dogecoin right now. Eventually the music volition stop and many people will lose a lot of money.

If you're going to invest in cryptocurrencies, y'all're much better of sticking with Bitcoin, Ethereum and a handful of other tiptop contenders with potent prospects.

Capture Gains Bigger Than Bitcoin

Institutional money has been a primary force in driving the stock market place to new highs. And at present some of that money has started moving into crypto.

Imagine if every unmarried investment firm on the planet began to diversify to include Bitcoin and other digital assets. If they put two%, iii%, or 5% of their capital into coins... it would exercise nothing less than trigger the biggest crypto inflow e'er, menses.

We've institute a way to make the nigh of this rare opportunity.

Nearly every time Bitcoin goes upwardly, certain members of this small form of little-known cryptos leap fifty-fifty higher; 142% in 12 days... 330% in 82 days... 273% in fourteen days.

Go the details right here.

Follow me on Twitter @DavidGZeiler and Money Morning on Twitter @moneymorning , Facebook , or LinkedIn .

About the Writer

David Zeiler, Associate Editor forMoney Morning time at Coin Map Press, has been a journalist for more than 35 years, including 18 spent atThe Baltimore Sun. He has worked equally a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk stone icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving atMoney Morning in 2011, he has focused primarily on technology. He's an adept on both Apple and cryptocurrencies. He started writing about Apple tree forThe Sun in the mid-1990s, and had an Apple blog onThe Sunday's web site from 2007-2009. Dave's been writing near Bitcoin since 2011 - long before nigh people had fifty-fifty heard of it. He even mined it for a curt time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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Source: https://moneymorning.com/2021/01/29/why-you-absolutely-should-not-buy-dogecoin-right-now/

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