Today, there are as many ways of making money with Dogecoin as there are of losing it all. After its recent popularity surge and subsequent ascension to the coveted list of the 15 largest cryptocurrencies across the globe, Dogecoin captured the crypto community’s attention globally.
And as Dogecoin value shot from oblivion to the highs of $0.7376 in 2021, effectively growing its earliest investor’s fortunes by more than 100,000%, it caught the attention of crypto traders and investors.
All is, however, not well with Dogecoin, and the internet is rife with stories of individuals who lost money investing in the joke currency. Frank Bird, for instance, recently narrated to The Sun UK how he lost £2000 with Dogecoin.
Even with such gory stories of investors who lost money with the coin and crypto experts branding Doge as one of the riskiest crypto investments, it still remains one of the most traded digital assets. In the last 30 days, for instance, its daily trading volumes have been fluctuating between $371 million and $6 Billion.
In this article, we will take you through the different ways you can make money with Dogecoin and also how to retain what you earn by avoiding the different ways people have lost money with Dogecoin.
Ways To Make Money With Dogecoin
Unlike such other cryptocurrencies as Bitcoin that have been adopted as a medium of exchange the world over, Dogecoin is primarily used for speculative investment purposes. The only significant real-world use Dogecoin has achieved is being accepted as payment for a ticket to Dallas Mavericks NBA games and as payment for Pre-owned Tesla from Bots - a Puerto Rican technology company.
So how do you make money with Dogecoin:
1. Dogecoin Trading
Trading is arguably the most popular way of making money with Dogecoin today. It involves buying the coin at relatively low prices and disposing of it immediately it posts tangible profits or as soon as it starts recording a loss.
At the time of writing, for instance, one Doge is selling for $0.15 on CoinDesk, having shed more than 7.58% in the last 24 hours. Now assuming that you were actively trading Doge and had entered into a short (sell) position, you would have booted your investment by 24% this week. Further assuming that your trades make you an average of 10% per week, you stand to grow this investment by more than 500% annually.
2. Dogecoin Investing
Buying and holding is the easiest and most beginner-friendly method of making money with Dogecoin. Unlike trading, which requires you to constantly the digital currency’s daily price action, you only have to buy the altcoin and hold on to it for months or even years, waiting for its value to eventually rise to unprecedented heights.
Do long-term Dogecoin investors make money? Yes. In the last year, for instance, Dogecoin’s value has appreciated by more than 3200%, implying that if you invested $100 in the coin at the beginning of last year, you would be $32,000 richer today.
However, given Dogecoin’s lack of a development team, a roadmap for the network, or even a clear vision, most experts are advising long-term investors (HODLers) to keep off the digital asset. George Chrysochou, the Global Marketing Manager for Financer.com, for instance, advises you to avoid Dogecoin because it “is not a reliable (long term) investment.” these sentiments are echoed by Shark Tank Investor, Kevin O’Leary, who says that he doesn’t consider Dogecoin to be an investment.
2. Dogecoin Mining
Armed with a powerful computer, ASIC, or GPU graphics card, you could opt to earn Dogecoin through mining. This involves verifying and confirming transactions on the Dogecoin and earning free coins. At the moment, the mining reward for each successfully created Dogecoin block is 10,000 Doge coins, worth $1,500.
In this case, you could opt to go solo or join a mining pool where you combine computation power with different individuals and share the mining reward based on the share of computer power contributed.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Ways to Lose Money With Dogecoins
To retain the money made from Dogecoin investing, trading, or mining, you first need to learn the different ways through which past doge investors lost their money. Then strategize on how to protect yourself from these losses. Here are some of the ways you can lose money with Dogecoin and tips on how to protect yourself from either.
Trading is as profitable as it is risky. Just as it can help you make a lot of money, especially when margin trading, it can also lead to massive losses. If you, for instance, bought Dogecoins last week, you would have lost more than 11.99% today. Similarly, if you had entered into a buy position yesterday, you would have lost up to 1.87% of your Dogecoin investment today.
You can, however, avoid losing money with Dogecoins by learning how to trade first. Before you start trading with real cash, you first need to perfect your trading skills in a demo account environment. Even when you transition to live trading, consider starting small and embracing all the risk management tools provided by the exchange or brokerage.
Hackers pose the greatest risk to crypto investing today. Leading financial regulatory authorities like the Federal Trade Commission (FTC-US) and the Financial Conduct Authority (FCA-UK) have already ranked hacking as the biggest threat to digital currency investments. Unlike in the past, where most of the hacks were perpetrated by lone individuals, today, professionals have come together and established sophisticated hacking networks that they use to attack crypto exchanges and wallets.
To protect your investments from hackers, start by using strong and unique passwords for your crypto wallet and exchange accounts. Further, embrace multi-factor authentication for logins to your wallet/exchange account and funds transfer. Where possible, store your Dogecoins offline by investing in a hardware wallet.
Crypto scams are also on the rise and top the list of ways investors have lost dogecoins in the past. Between October 2020 and May 2021, for instance, the FTC reported that more than $80 Million worth of crypto assets were lost to scammers. They have also listed the tops crypto scams that can lose you Dogecoin as Ponzi/pyramid schemes, social media scams, fake websites/DeFi apps, and even pump and dump schemes.
You can avoid falling victim to crypto scammers and losing your Dogecoin investment by keeping off get-rich-quick schemes. Even more importantly, you need to keep tabs on the crypto industry happenings. Learn about the emerging crypto scams and tips on how to avoid them.
Bottom Line: How To Make (Or Lose) Money With Dogecoins
There are multiple ways of making money today, but the risks of losing both the initial investment capital and the interest earned have increased immensely. Therefore, as much as you are learning and exploring different ways of making more money with Dogecoin, you also need to dedicate a similar effort to understand how to keep this investment safe. Ensure that you perfect your skills before you start trading, use strong and unique passwords, avoid get-rich-quick scams, and, where possible, store your Dogecoins offline in a hardware wallet.