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Investing in Dogecoin (DOGE)

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Dogecoin is one of the first meme cryptocurrencies launched in late 2013. Its devoted to the memes about the Shiba Inu dog. Even the creators of the cryptocurrency, Billy Marcus and Jackson Palmer, admitted that they didnt have any higher purpose when creating DOGEthey just wanted to have some fun.

However, the community and publicity like the concept of the meme coin, and by 2021, it massively increased in price. Today, Dogecoin has a lot of competitors, and its traded much lower than the year before. Can the situation change in favor of DOGE holders? Lets figure this out.

How does Dogecoin work?

The major features of Dogecoin arent much different from the other crypto assets. Like the majority of cryptocurrencies, Dogecoin is operated on its original blockchain ecosystem. The developers of the blockchain try to keep up with the trend and constantly add new features of transactions to the network. The updates that improve security are made regularly.

Like many other early cryptocurrencies, the Dogecoin network relies on the proof of work model. In a nutshell, this mechanism is applied when users use their computers to mine cryptocurrency by solving complex mathematical equations to process and add transactions on the blockchain. The coins, received by this method, can later be sold on crypto exchanges.

Owners of Dogecoin may use it to make purchases and pay for different services online via special systems that accept payments in DOGE. However, the design of this cryptocurrency makes it very vulnerable to inflation because the number of Dogecoins that might be mined is not limited. When millions of coins are created daily, the supply of the asset increases and its price goes down.

Key Events Impacting Dogecoin Price

  • From the very beginning, DOGE wasnt very popular with wide publicity. However, it was used by Reddit users. In 2014, the Dogecoin community on Reddit raised $55,000 to sponsor a NASCAR driver. At that time, to raise such an amount, users had to donate more than 65 million DOGE coins in total.
  • Dogecoin became a true mainstream thanks to the CEO of Tesla, Elon Musk. Actually, there were two events related to Elon that raised the popularity of the cryptocurrency. Firstly, in February 2021, Musk started posting different tweets about DOGE that increased its price by 50%. In one of the tweets, the billionaire said that Tesla vehicles could be bought for Dogecoin as well.
  • In March 2021, Dogecoin surged from $0.05 up to $0.33. This happened after Elon Musk tweeted that Dogecoin was his favorite cryptocurrency. He also offered to make DOGE the main currency of the internet.
  • In summer 2021, Dogecoin fell by more than 20%. Experts explained that it happened due to the restrictions against cryptocurrencies implemented by Chinas Central Bank. It was ordered to continue the Bitcoin crackdown, which led to the networks being congested. Because of this, price rates started falling down.

Trading Dogecoin with DotBig

Below, you will find out the advantages and disadvantages of making investments in DOGE. Before you make the final decision, you need to learn about the reliable platform where you can trade cryptocurrency. DotBig.com is a good option.

DotBig.com is a forex broker that provides access to multiple financial markets, including forex, stocks, and crypto. With the DotBig forex broker, traders can create diversified portfolios and include DOGE in them. Trading Dogecoin is easy with DotBig because of the topnotch charting systems and other tools that make the process more automated.

The DotBig forex broker allows making deposits not only in fiat currencies but in digital money as well. Clients of the platform can instantly withdraw their funds via Bitcoin, Ethereum, Teather, or Litecoin.

Finally, the broker offers the DotBig card. Its a unique tool that provides investors with the possibility to store their crypto funds on a card and quickly convert them into fiat money, which might be later withdrawn via ATMs into cash.

Pros & Cons of Investing in Dogecoin

Pros

  • The community devoted to Dogecoin is growing. Even though cryptocurrency isnt mainstream in 2022, its community is still big, and it keeps growing. Besides, this community is very active on social media. It makes a great contribution to the Dogecoin promotion;
  • DOGE is traded on decentralized exchanges. It also can work on the Ethereum blockchain network;
  • The coding of Dogecoin is very similar to the coding offered by Bitcoin. Thanks to the number of common features, Dogecoin enables fast and easy transactions;
  • Dogecoin is listed not only on pure crypto exchanges, but on stock exchanges as well. One of the best examples of listing Dogecoin is eToro;
  • Dogecoin has a unique concept. Actually, it became the pioneer among the meme coins.

Cons

  • The lack of a supply cap does not allow DOGE to be efficient against inflation. Because of this, the price of the coin goes down when the supply increases.
  • It is not the best transactional currency.

Conclusion

To sum it up, Dogecoin isnt a bad investment idea. It might be a good option for beginning investors who want to buy big quantities of crypto at low costs, or for those who like investing in highly speculative assets. Whatever your purpose is, remember that any kind of trading is always risky. Do not neglect the analysis and proper research before investing cash in volatile markets.

 

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