In 2021 Dogecoin came from relative obscurity to become one of the most talked about cryptocurrencies in existence. For the first half of the year, it seemed that DOGE was never out of the news and the altcoin attracted a huge amount of interest from both online communities and leading figures in the worlds of business and entertainment.
So how does Dogecoin stand as an investment opportunity in 2022? In the following guide, we’ll be taking a closer look at this unlikely crypto success story and weighing up what sort of future.
DOGE may have in an ever-evolving blockchain industry. If you’re considering adding the altcoin to your portfolio, hopefully the information in the following article will help you manage your expectations.
What Is Dogecoin?
The Dogecoin project was originally intended as something of a joke. It was created in 2013, a time when the first wave of crypto hysteria was in full swing and token prices were subject to wild speculation. Dogecoin was intended as a kind of parody of this situation.
The project was initially set up in 2013 by Jackson Palmer, a product manager at the Australian office of Adobe. The whole thing started as a tongue-in-cheek satire but continued to snowball until the Dogecoin blockchain was actually launched. However, as we now know, the Dogecoin joke has become somewhat ironic.
Despite its lighthearted origins, the Dogecoin blockchain is based on some pretty solid technical fundamentals, more or less lifted directly from Litecoin. The architecture is not that dissimilar from Bitcoin’s. It is a decentralised network that relies on a proof-of-work consensus mechanism. However, of the three, Dogecoin has the faster completion rate. For example, Litecoin can add a block every 2.5 minutes, whereas Bitcoin takes ten minutes.
Dogecoin is based on a modified version of Litecoin and actually posts faster speeds, capable of completing blocks in just 1 minute. Whilst it is a fairly dated system by today’s standard. Dogecoin is actually one of the more advanced value-exchange networks of its generation.
Today, Dogecoin is the leading meme coin on the market and has a great deal of support from its community of die-hard supporters. Whilst it cannot compete with today’s smart chains on a technical level, Dogecoin is undoubtedly one of the most fashionable cryptocurrencies in existence.
Dogecoin: Key Facts
- Launched in 2013 by Adobe alumnus Jackson Palmer
- Based on the Litecoin blueprint
- Originally intended as a joke
- The original meme token
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The Dogecoin Success Story
Dogecoin started life as a joke and was seen as such for a long time. In fact, the project had almost faded into obscurity save for its committed online community. However, this all changed in 2021, when DOGE suddenly surged in value by several hundred percent and barged its way into the list of the top ten cryptocurrencies by market capitalisation.
In fact, the Dogecoin price surge in early 2021 was one of the major stories of the year and, unbeknownst at the time, was a forerunner of a market wide bull that would see many records broken before January 2022 arrived. Between January and May, the price of Doge had surged by over 18,000%
So how did this price surge happen? In reality, a series of events was responsible for Dogecoin’s remarkable renaissance. The initial buzz was generated in the online community, active on Reddit. Following the remarkable Gamestop saga in the opening weeks of 2021, the dogecoin community sought to replicate the retailer's success with their favourite cryptocurrency.
Dogecoin was soon moving up the charts but, what really lit the touch paper was a timely comment from Tesla mogul Elon Musk, apparently expressing his support for the token. Dogecoin started to soar in value and FOMO led to many crypto enthusiasts jumping on board. Whilst Dogecoin has dropped from its all-time high of $0.73 to a trading price of $0.08 at the time of writing, it remains one of the most popular tokens on the market.
The DOGE Token
One of the reasons that Dogecoin has been able to muscle its way into the top-tier cryptos in terms of market capitalisation is the sheer number of tokens out there. Whereas Bitcoin and Litecoin are designed to increase in scarcity as time goes on, Dogecoin has instead a deliberately stable inflation rate thanks to its ongoing block reward of 10,000 DOGE per block.
At the time of writing, there were some 132,670,764,299 Dogecoins in open circulation with a market capitalisation of $10,945,695,461. DOGE has also been posting consistently high trading volumes since its success in early 2021.
The First Meme Coin
Dogecoin was the first of a new breed of cryptocurrencies called meme coins. Doge itself was based on an internet meme that was doing the rounds back in 2013 featuring a Shiba Inu dog–this animal has gone on to become the face of many different meme coins and has achieved an almost mythical status in the world of cryptocurrency.
Whilst meme coins have undoubtedly generated huge returns for some lucky investors, they are notoriously volatile and many market commentators have questioned whether they have any real worth. Many of the leading projects, such as Dogecoin and Shiba Inu don’t have a particularly unique use case and there’s very little by way of technical innovation. So it’s important to understand that meme coins are driven by community, i.e. popularity.
Dogecoin remains the leading meme coin and its legion of copycats suggest that there is some life in the scene yet, but it’s fair to say that meme coins in general are on the riskier side of the cryptocurrency investment spectrum.
How To Buy Dogecoin
If you’re looking to invest in Dogecoin then the good news is that the token is widely sold and you’ll have numerous options when it comes to choosing a market place.
- The first thing you’ll need to do is get yourself a cryptocurrency wallet that can support Dogecoin. If you’re unsure of where to start, we recommend checking out our guide to opening a crypto wallet.
- With your wallet set up, then you need to find a broker or exchange that can give you access to the market. We recommend eToro–especially if you’re new to the world of online crypto investment.
- Once you’re set up with an account then you can issue a buy order for DOGE, stating how much you wish to buy.
- Finally, you can either keep your newly acquired DOGE on the platform or send it to your own wallet for safekeeping.
Read More: How To Buy Dogecoin (DOGE - Beginner’s Guide
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Dogecoin In 2022
Dogecoin has seen some fairly substantial price drops in 2022, as has the wider cryptocurrency market. Having started the year trading at around $0.17, DOGE dropped to $0.13 by the end of January. As always, there was a degree of volatility but generally Dogecoin trended downwards over the next few weeks, dropping to $0.11 in March.
There was a price spike in April, which saw the meme coin rising back up to around the $0.17 mark, but a major market crash struck in mid-May and Dogecoin was dragged down to its current trading price of $0.08.
Is Dogecoin A Good Investment?
A notable feature of meme coins is that they trade at relatively low value. Dogecoin’s highest ever price was just $0.73. This means that investors can acquire a significant holding of DOGE with reasonable small outlay. This has no effect on returns, of course, but for many investors it's a big psychological advantage.
When looking at Dogecoin price predictions from leading analysts, it seems that we can expect further growth from DOGE in future, albeit accompanied by significant volatility. For example, DigitalCoinPrice has the token reaching as high as $0.17 by 2025–more than double today’s value, whereas WalletInvestor’s technical analysis suggests DOGE could hit as high as $0.39 in the same timeframe.
The reality for investors is that Dogecoin very much depends on trend dynamics. A concerted effort from the DOGE community or a timely comment from a well-known celebrity could see its price skyrocket, but it's equally possible that it could fall out of favour. The problem with trends is that they have a tendency to be ephemeral and in many cases never repeated.
Here at Trading-Education, we think that Dogecoin could still be a good addition to your portfolio but it should be seen as a riskier addition that should be tempered by one of the more stable cryptocurrencies out there.
Don't Miss: Dogecoin (DOGE) Price Prediction
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Dogecoin In The News
Dogecoin has been in the news again lately and once again Elon Musk has been the source of it. Following a market slump that struck in May 2022, Musk announced that SpaceX will now be accepting payments in DOGE. It’s understood that the cryptocurrency will be accepted for all SpaceX merchandise.
Whilst this news did not set off a major price run as we saw in early 2021, it did cause DOGE to spike by around 10-15% and it is certainly good news for a token that relies on keeping its profile high.
Elsewhere, it has also been reported that Dogecoin is one of the most-purchased tokens by whales–large scale institutional investors–following a buying spike in May 2022.
Conclusion
Dogecoin has been around for almost a decade and today it’s one of the most widely known cryptocurrencies on the market. The project is known for having an ultra-loyal community that is committed to making the project a success. Of course, the occasional word of support from Elon Musk hasn’t done Dogecoin any harm either.
Whilst it is based on solid technical fundamentals, Dogecoin is pretty dated by today’s standard. It cannot support smart contracts, which means it's limited to being a simple value exchange token. However, we should point out that this is also true of Bitcoin, which remains the most valuable cryptocurrency by a considerable margin.
We have also looked at two Dogecoin price forecasts that suggest DOGE is poised for growth in the coming years. Of course, these are only speculative but it certainly bodes well for the Dogecoin project to have such support.
If you’re looking to invest in Dogecoin, then we’d suggest a degree of caution as it isn’t the only meme coin out there and there is some evidence to suggest that the ‘Musk effect’ is wearing off. Investors should definitely be viewing DOGE as a riskier investment–even by cryptocurrency standards. Of course, there’s always the chance it will blow up again in future.
Open an account with eToro, deposit some funds with USD, and finally – buy Dogecoin from just $10.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Dogecoin FAQ
What is a meme coin?
Meme coins are cryptocurrencies that generally have a lighthearted or tongue-in-cheek approach and look to build a strong online following. However, many of the top projects are built with sound blockchain fundamentals and can support a range of functions.
Is Dogecoin secure?
Dogecoin is based on the Litecoin blueprint and is just about as secure as any blockchain project. Of course, it’s technically possible for the system to be compromised, but Dogecoin is generally considered to be one of the most secure cryptocurrencies on the market.
Is Dogecoin finished?
Dogecoin saw massive price movement in early 2021, with some of the fastest price spikes in crypto history. Many have speculated that the meme coin’s glory days are behind it now but, to be fair, many said that Dogecoin was finished a long time before 2021.
Should I invest in Dogecoin?
Any cryptocurrency investment carries a certain degree of risk, but Dogecoin is arguably one of the riskier tokens. However, with that risk comes the potential for more significant returns. We’d suggest investing in DOGE only as part of a strategy that includes plenty of diversification both within and without the cryptocurrency industry.
Is Shiba Inu going to overtake Dogecoin?
Shiba Inu is definitely Dogecoin’s biggest rival and was initially touted as a ‘Dogecoin Killer’. However, Shiba Inu has diverged from its original intent and now offers a wider DeFi infrastructure. However, SHIB is an ERC-20 token, whereas Dogecoin has its own proprietary blockchain, making it a far more unique project. We think it's possible that Shiba inu could one day overtake Dogecoin, but as it stands the original meme coin is still the one to go with.
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