The cryptocurrency trend is still going strong with Dogecoin stealing the spotlight. The meme-based cryptocurrency is up by more than 12,000% this year. If you’re new to crypto, you can read our article on where to buy Dogecoin here. However, one also needs to know what they’re investing in and getting into.
Here’s a quick look at what you need to consider before dipping into the world of cryptocurrencies and Dogecoin. Additionally, if you’ve already invested in the cryptocurrency and are looking for ways to spend it, we have you covered.
What is Dogecoin?
Before investing in Dogecoin, it is important to understand what it actually is. Dogecoin, in simple terms, is a cryptocurrency similar to Bitcoin. It was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer back in 2013. It is an alt-coin that started out as a joke but has gained notable momentum this past year.
Now that we know what Dogecoin is, we can take a look at things to consider before investing in it. However, before we proceed, do note that this article is not to be considered as investment advice. As always, investing in any asset can be risky and should be done after sound financial research and advice.
Things to consider
There are multiple things to consider before you invest in any cryptocurrency. Here are some key things to consider before investing in Dogecoin.
The first and foremost thing to note is Dogecoin’s high volatility. Dogecoin witnessed serious price fluctuations over the past few months as it rallied to an all time high of around $0.70. However, soon after, it crashed to around $0.45. While Dogecoin has gained notable momentum with more people learning and investing in it, these investors also cash out when it spikes, thus crashing its price as a result.
Not just stocks but cryptocurrency can also be influenced by prominent personalities. Elon Musk, the self-appointed Dogefather and community dubbed Dogecoin CEO, has repeatedly tweeted about the cryptocurrency. As a result, its prices spiked sharply a couple of times. It only stands to reason that if an individual can influence Dogecoin pricing, it could go either ways.
While Musk has always showed support for the cryptocurrency, his recent appearance on Saturday Night Live (SNL) was expected to push its value near the $1 mark. However, that didn’t happen and in fact, Dogecoin fell sharply after his SNL appearance.
Playing with a bubble?
The Dogecoin cryptocurrency can be seen as a bubble that crashes soon. However, not considering it as such will be more of an issue since its price fluctuates based on how many people are holding it, how many Dogecoins are in circulation and how many are being added every day. If one checks out Dogecoin’s price graph, the general expectation will be that it will go up in the future but sadly, there’s nothing backing up that notion. Even if one invests in the crypto, they might think of cashing out before the bubble bursts but isn’t that what every investor is thinking?
FOMO and the sheep mentality
With Dogecoin taking over social media and everyone talking about investing in it, there can be real Fear Of Missing Out or FOMO on a lucrative investment opportunity. But before that happens, it should be taken into account that not everyone is as successful as the person who became a millionaire banking their life savings on a transient trend.
Spending your Dogecoin
Unlike stocks, one can use crypto currencies they’re holding to actually purchase something. In case you want to spend your Dogecoin in the UK, there are some outlets that accept it as a form of payment.
Luxury hotel group, The Kessler Collection announced accepting Dogecoin as payment at its hotels through a partnership with BitPay. UK-based Burger Bear apparently now accepts Dogecoin as a form of payment. Similarly, while shopping for apparels on MaxiShopM, one can pay via Dogecoin. There are a few services and goods providers that accept doge, which you can check out in detail here and here.