The cryptocurrency market is experiencing quite a revival. Since March 2020, Bitcoin and peers have been gaining constant upward momentum. Prices are soaring, and this trend has greatly accelerated since the beginning of the year.
However, there’s one coin that stands out from the crowd. The prize of the best-performing cryptocurrency might just go to a veteran of the industry — Dogecoin! In April 2021, the meme-coin registered over 600% rise, surpassing more recent and innovative projects.
Of course, this has sparked a lot of interest for DOGE in the mainstream media. Beginner investors are flocking the market to buy coins. With that said, many don’t really understand the fundamentals of the DOGE cryptocurrency.
This article will give you a detailed overview of Dogecoin including its origins, characteristics, and recent developments that caused its price to spike. After going through this post, you should have a good idea of what Dogecoin really is and whether it is the right crypto for your investment portfolio.
Introduction to Dogecoin
Dogecoin was released in December 2013 and is considered one of the veterans of the crypto space.
Its creators, programmer Billy Markus and marketer Jackson Palmer, were passionate about the crypto market but found it very beginner-unfriendly. As a solution, they developed a coin that would be based on something everyone loves — the Shiba Inu Doge meme.
Borrowing the popular meme for their logo, Dogecoin’s creators launched a new cryptocurrency, going against the seriousness of the crypto market. Their goal was to create a coin that would be cheap and easy to use.
This lighthearted approach encountered immediate successб and the community grew exponentially. The DOGE coin skyrocketed in the top 10 of most valuable cryptos in the first year following its release.
Main characteristics of Dogecoin
On the technical side, Dogecoin is a fork of Litecoin. This means that it borrows some characteristics from its parent cryptocurrency. However, Dogecoin has some unique elements as well. Here are its most prominent features:
- New DOGE coins are mined using the Scrypt algorithm and specific pieces of hardware, called ASICs.
- DOGE coins can be obtained as a side-product of Litecoin mining.
- Every minute, 10,000 new DOGE coins are created.
- There’s no limit to the supply of DOGE. Theoretically, there can be an infinity of Dogecoins released in circulation. This is in contrast to Litecoin’s max supply of 84 million coins or Bitcoin’s 21 million.
Why does DOGE have value?
Although it started as a joke coin, Dogecoin has amassed a huge following over the years. The community is regarded as one of the nicest in the crypto sphere and has participated in multiple charitable events. A great example of this is the fundraiser that allowed the Jamaican bobsleigh team to attend the 2014 Winter Olympics.
Having said that, Dogecoin’s success mainly comes from the huge social media attention it has enjoyed. For instance, an unexpected price rally occurred in the summer of 2020, when the price spiked almost 2,000% following a viral TikTok video. Spikes like these are a great time to make a DOGE to BTC convert anonymously. For this, you can use the secure and reliable Godex.io crypto exchange.
Furthermore, Dogecoin is the favorite cryptocurrency of Twitter celebrity and Tesla CEO Elon Musk. He often sends cryptical tweets about Doge, which are always followed by a huge price rally for the coin.
So, is DOGE a good investment?
It’s quite challenging to give a straightforward answer to this million-dollar question. Instead, we can analyze the fundamentals behind the coin and conclude the following:
Dogecoin’s unlimited supply means that its value is continuously diluted with millions of coins (roughly 14.4) created every day. This is a big red flag for any long-term investor.
However, Doge is notorious for its huge price spikes (followed by big price dips). Catching one at the right time can be quite profitable. Here’s what to keep in mind if you are chasing the next DOGE pump:
- Follow Elon Musk on Twitter and stay on the lookout for Doge mentions.
- Check out crypto social tools such as Lunarcrush to get a good feeling of the market sentiment.
- Search “How to buy Doge” on Google Trends and watch out for sudden growth in the trend.
Just keep in mind that fundamentally, Dogecoin is quite a weak cryptocurrency. Consequently, ensure to take profits whenever you feel the market is shifting in your disfavor.
Dogecoin has become quite popular, mainly because of the media attention it has been getting thanks to different celebrities. This has allowed its price to skyrocket, drawing in the attention of the mainstream investor.
All in all, Dogecoin is a fun cryptocurrency, but fundamentally weak. While it’s not recommended to hold it as a long-term investment, it can bring big profits if you are agile in your trades.