Pros and Cons of Investing in Dogecoin, Will It Be a Millionaire Maker?

Is It Good to Invest in Dogecoin?

Last Updated October 13th 2021
26 Min Read

Gain an extensive understanding of the pros and cons of investing in Dogecoin which will push you ahead to know if it’s a good idea to invest in Dogecoin.

Dogecoin (DOGE) having returned as much as 4,269.38% may just be the winning asset needed to bring huge gains to your portfolio of investments. In this article, we are going to take an in-depth look as to why you may consider setting aside your hard-earned money to invest in Dogecoin, the pros, and cons as well as important factors to look out for. 

Before investing in Dogecoin, you must do independent research to understand what the digital asset is so that you know what you are getting yourself into. Investing in Dogecoin as a trader or investor who does not embark on fundamental or technical analysis increases your chances of making irrecoverable losses.

First and foremost, Dogecoin isn’t the usual cryptocurrency that follows the conventions of investing. Instead, it offers something unique (its joke factor as a driver of its price). Several cryptocurrencies cannot say the same as they have to ride on adoptions and integrations as well as innovation of its technology. 

Dogecoin, unlike Ether (ETH), Tronix (TRX), or Cardano (ADA) which provides smart contracts, is one of the pioneers of cryptocurrency which relies on its base layer to serve a purpose as a transactional currency.  

While this presents a great opportunity for usage, you must know what Dogecoin is, what it offers users, and other potential indicators to look out for as a novice trader or investor. This is because no investment is perfect. 

If you are interested in jumping into investing in Dogecoin (DOGE) with 0% commission, you can check out eToro Exchange!

Contents:

What is Dogecoin? 

what is dogecoin

According to the official website of Dogecoin, it is a decentralized peer-to-peer cryptocurrency that enables users to easily send and receive money online without any centralized authority. To put it simply, it is a currency for the digital world. 

The blockchain behind the cryptocurrency was created by software developers Billy Markus and Jackson Palmer in 2013. 

Dogecoin exists as two separate but interrelated technological innovations. 

The Dogecoin Network is a digital payment system used for the settlement of financial transactions. 

DOGE is a digital currency that works on the Dogecoin network. 

The primary idea behind Dogecoin is to create a cryptocurrency that is more approachable and friendly. Since Bitcoin and Litecoin were solely based on many technicalities which confused several people as to why the digital assets wanted to break into the traditional financial system, DOGE decided to be different and provide a fun side towards its usage. 

Instead of focusing on being adopted in the mainstream by well-established institutions, the Dogecoin Community decided to use it for charitable projects. 

Due to its difference, DOGE has a relatively easy mining process and its usage in humanitarian work to several crypto enthusiasts shows the availability and sustainability of the crypto project. 

Just a couple of years after the cryptocurrency was released; it was able to forge partnerships with several online retail outlets in the technology space. Slowly but surely well-established institutions have begun showing interest in using DOGE as an option of payment. In 2021, several partnerships have been formed and more are expected to come in the months leading up to the end of the year. 

Some of the biggest adopters of DOGE as a transactional currency include COVCARE and Dallas Mavericks. 

What’s more, there are whispers that Amazon and Coinbase may consider adding and listing DOGE respectively in the not-so-distant future. 

With such huge mileage ahead of the digital asset if these partnerships come to the past, what are the pros and cons of investing in Dogecoin? 

If you want to know more about the pros and cons of investing in Dogecoin which would put you in a better position to understand if it is a good idea to invest in DOGE, then you are on the right platform for your technological insights. 

The PROS of Investing in Dogecoin

What are the benefits of investing in Dogecoin?

Dogecoin has returned 4,269.38% year-to-date. What are the primary drivers behind such a price increment? What are the merits of investing in DOGE? 

Lots of crypto analysts and speculators think Dogecoin has a big future, making it an attractive option for new and established traders. So, here’s a quick look at why Dogecoin is a good investment.

✅ Day Trading DOGE is Profitable

One of the pros of investing in DOGE is you can DAY TRADE the cryptocurrency. You can earn profit by capitalizing on volatility. 

You can buy DOGE when you research about the cryptocurrency and get to know its bullishness in the future. If your prediction comes to pass and DOGE starts increasing, you can convert DOGE to a stablecoin such as USD coin or Tether. 

As soon as the price begins to fall as a result of sell-offs by short-term investors, you can convert your stablecoin back to DOGE. This would see you accumulate more dogecoins. 

Due to its volatility, small price changes can return huge gains for investors who know their way around investments. 

Read Also: How to Trade Dogecoin: A Step-by-Step Guide

✅ Engaging Social Media Fans

One of the pros of DOGE is its fans across social media networks such as Reddit, WallStreetbets, Twitter, and Facebook. Monitoring the feeds and chats of DOGE holders alerts you to get to know where the price of DOGE is headed. Some of the comments alert you as to a huge price spike in the future.

There are other comments which inform you of a drop in price which is unfavourable for short-term investors. The same fall in price can also cause an UPTREND as DOGE reaching new high lows can cause extensive interest in price to reach new high highs. 

✅ Elon Musk's Positive Dogecoin Comments 

One of the pros of investing in dogecoin is ELON MUSK. It’s extremely difficult to associate a tweet or an interview of a tech entrepreneur with the price of a cryptocurrency.

Unfortunately, the "Dogefather" has made a huge name for himself with regards to DOGEs acceptance as a transactional currency. Additionally, his promotion of the coin has sparked an interest that has led to several exchanges listing the cryptocurrency for trading and investing. The impact of Elon Musk can be summed up in this example. 

On 1st April 2021, Elon Musk tweeted, “SpaceX is going to put a literal Dogecoin on the literal moon”. DOGE opened on 1st April 2021 at a trading price of $0.05365. Dogecoin reached a day high of $0.07011 and closed the day at $0.06199. It closed the day with a trading volume of $5,816,046,822. Its previous close in trading volume recorded on 31st March 2021 stood at $653,389,282. In less than 8 hours, there was a 30.6803% increase in price. Additionally, in the space of 24 hours, there was a 790.135% increase in trade volume. Trade volume certifies investor interest and confidence in the potential of an asset in the future. Keep an eye on the comments of Elon Musk on Dogecoin and you’d be able to make huge gains on the asset if the comment is positive. 

Don't Miss: Dogecoin Price Predictions

✅ Dogecoin Has a Humanitarian and Friendly Feel to it

DOGE is used to tip several people on social media depending on the kind of content they are providing on a variety of subjects. It has also been involved in great social causes. Some of them are dogecoin being used to raise funds for a Bobsled Team from Jamaica for a total of $50,000 for the 2014 Winter Olympics held in Sochi, Russia. 

Aside from this, Dogecoin has been used to sponsor athletes. Shiva Keshavan is an athlete who has benefitted from the fundraising efforts of the joke currency. On 25th March 2014, DOGE was the sponsor of NASCAR driver Josh Wise through a fundraising effort that generated $55,000

Being involved in numerous humanitarian causes brings mileage to the meme-inspired currency. Although it’s a joke currency, such projects draw traders and investors to the asset and make positive decisions on adding the digital currency to their portfolio. 

✅ There Are Several DOGE Available For Purchase

Unlike other cryptocurrencies, Dogecoin is infinitely mineable. There is no limit to its supply. As a result, any individual who wants to purchase DOGE either as a fun thing or as a serious investing deal can do so across numerous cryptocurrency exchanges. Such availability brings more liquidity, activity, and usage to the cryptocurrency. This explains the huge transaction count of 22,044 involving DOGE which was worth $73,222,209 in the last 24 hours up to the time of writing this article. 

✅ Trade Volumes Are Soaring Through the Roof 

DOGE spiked on the weekend of 7th to 9th May 2021. At the time of writing, DOGE had recorded a trade volume worth a staggering $45.66 billion. This was a 78.11% increase in trade volume from its close on Saturday, 8th May of $25.56 billion and a huge stretch from the $18.99 billion recorded on Thursday, 6th May. Constantly monitor this vital statistic once or twice daily and compare it to volumes recorded in previous weeks or months. The current figure presents DOGE as a digital asset with a strong buy rating due to the thousands if not millions of people who are showing interest in the asset. 

✅ More Exchanges Have Started Listing Dogecoin

Dogecoin was already trading on some of the most popular cryptocurrency exchanges and brokerages. In the early days of May, it has seen new listings. 

On Monday, 3rd May 2021, multi-asset brokerage eToro showed its support for the cryptocurrency. Their reason for listing the cryptocurrency was attributed to strong client demand. eToro serves more than 20 million clients. Through this listing, DOGE has added more clients to its already existent clientele. 

On Tuesday, 4th May 2021, cryptocurrency exchange Gemini listed dogecoin. Users of Gemini currently have DOGE in their sights as an option of investment. This does not only explain the trade volume and current market capitalization of the cryptocurrency, but it also explains why DOGE has a new all-time high of $0.7376 recorded on 8th May 2021. 

With more of such partnerships in the pipeline, particularly Coinbase being pressured to list DOGE, the future looks bright for the cryptocurrency. If Coinbase lists dogecoin one day, the digital asset could gain more exposure and contribute extensively to the overall valuation of the cryptocurrency. 

✅ Dogecoin scales relatively faster than Bitcoin

As a fan cryptocurrency, DOGE is built on a basic technology associated with cryptocurrencies. This allows it to verify transactions and prevent double-spending attempts by users. Through this process, it provides secure access for the sending and receiving of money without intermediaries.

DOGE employs SCRYPT in its algorithm. This has seen the cryptocurrency have a relatively faster processing speed than BTC. This could help its adoption and integration as a transactional currency in the future. Once more institutional partnerships are formed, DOGE would move from its tipping and humanitarian currency status to a real digital currency that services millions of customers daily. 

Read More: Bitcoin vs Dogecoin

✅ Could Benefit from More Mainstream Partnerships

 In the year 2021, Dogecoin has benefitted extensively from the crypto boom. Through a renewed interest in cryptocurrencies and digital assets as a whole, DOGE was recognized by one of the largest medical suppliers in the world, COVCARE. 

Mark Cuban, another fan of the cryptocurrency, linked the digital asset to the team he owns, the Dallas Mavericks. Such partnerships confirm the legitimacy, credibility, and authenticity of the cryptocurrency to break into the mainstream. Although it is seen as a joke, daily usage of the coin certifies it as a normal digital currency that is friendly enough to be adopted by millions of people globally to satisfy our transactional needs. 

✅ DOGECOIN Is Based On Its Cultural Value

In a traditional sense of making investments, dogecoin wouldn’t be the primed asset to consider for your portfolio. Due to the buzz around crypto, assets don’t necessarily need to have strong fundamentals to command great trading prices. 

It is about like, popularity, and what traders and investors are willing to pay for an asset. With several unsophisticated investors asking millions of questions on dogecoin, the asset has become relevant in the investment space. You can purchase Doge based on its cultural impact on decentralized finance. There is a huge chance you could come up with great returns. If you do not, you are part of something bigger which sees people take back privacy and independence in their financial activities. 

Check Out: Should You Buy Dogecoin?

The Cons of Investing in Dogecoin

Like any investment, putting your money into Dogecoin isn't risk-free. So here's what you should know about the risks of investing in Dogecoin.

What Are The Disadvantages Of Investing In Dogecoin?

Despite the benefits associated with investing in Dogecoin, several financial news portals are signaling a collapse of DOGE in the future. Let us take a look at some of the negatives associated with the cryptocurrency which can help you decide as to whether doge is a good investment or not. 

❌ There are Questions Surrounding Leadership's Belief in the Cryptocurrency

Leaders are supposed to act by example. Unfortunately, this is not what dogecoin is seeing. In 2015, co-founder Billy Markus sold all the dogecoins he was holding to buy a Honda Civic. 

Charlie Lee of Litecoin did the same thing in December 2017 which called into question the potential of the asset if the leader decided to sell his holdings. Not holding a significant amount of your creation raises doubts as to future innovation and partnerships which could be attained to drive the price of the crypto. Currently, social media fans and a few noteworthy individuals are carrying the coin and not the people who should be taking decisions to drive the value of the digital asset. 

❌ Dogecoin Relies On Its Fun Nature and Not Any Real Innovation

Investment stories across several financial news portals are too focused on the meme currency's joke nature rather than on any breakthrough innovation. Understandably, DOGE was created to poke fun at other cryptocurrencies such as Litecoin and Bitcoin. 

With a saturated market comes great innovation which could foster the adoption and integration rates of the digital asset. With so much hype surrounding the cryptocurrency, upgrades to its technology in terms of decentralized finance applications could boost the price substantially.

Unfortunately, it remains a joke and as a result, has been left to fend for itself as a transactional currency. Investment-wise, price is determined by how much fans want the crypto asset to trade for. They also decide the price and time to dump the cryptocurrency for other coins which have strong fundamentals to back its price. This is a sign to watch out for as dogecoin may not be a long-term investment. 

❌ Too Much Reliance on Elon Musk to Drive its Price

Before Elon Musk hosted Saturday Night Live on 8th May, social media channels Facebook, Twitter, and Reddit were congested with what Elon Musk was going to say. Feeds were been spammed. A new investor with an interest in Doge found it difficult to read credible and useful information about the future of the coin. This was because there were thousands of messages within short periods within a post. 

Fortunately or unfortunately, Elon Musk hosted the show and said dogecoin is a hustle. DOGE opened on Saturday, 8th May at $0.6878. With huge anticipation ahead of Elon Musk’s appearance on the comedy sketch show, dogecoin hit a day high of $0.7376 which also stands as its all-time high. It closed the day at $0.6364. The aftermath of the program and Musk’s comment saw a huge plunge in the cryptocurrency’s price on Sunday, 9th May. Dogecoin opened at $0.6258, reached a day low of $0.4257, and by the close of the day had a price of $0.5701. In the space of 24 hours, DOGE shed 42.2858% of its price. 

If the creators of the digital asset do not find new and improved ways of seeing the cryptocurrency survive in the market, DOGE could plunge into extinction zones soon.

❌ Associated With Pump and Dump Schemes 

Pump and Dump have been in existence for a long time. It is illegal on regulated crypto exchanges. This has not done much to limit its influence on the crypto market due to its decentralized nature. Pumping is where a group of people purchase a large number of coins, in this case, dogecoins. This increases the price of the asset substantially. Once the assets reach a relatively higher price than what they purchased them for, they release the assets to other buyers and rake in a huge return. 

Through this, several traders and investors who are holding their assets for the long term see huge losses associated with their investments. Numerous individuals on the various social media platforms keep promoting dogecoin to people. Once it reaches the price which meets their investment goals, they decide to sell the asset off. Keep an eye on your holdings once or twice daily or you may lose all your money. 

❌ Dogecoin Is Not the Number One Transactional Currency 

Built on the basic layer of blockchain technology, dogecoin has a primary function of sending and receiving money over the internet. This means that unlike other cryptocurrencies such as Tronix (TRX) and Ether (ETH) which powers the network of their respective blockchains as well as function as a transactional currency, DOGE can only be used as a digital currency. 

The most popular transactional currencies are Bitcoin (BTC), Litecoin (LTC), Dash (DASH), Bitcoin Cash (BCH), and Ether. They are integrated into millions of merchants worldwide. Among the merchants are credible institutions such as PayPal and Skrill which allow users of the platform to purchase items as well as buy, sell and hold the cryptocurrencies on their wallets. This does not bode well for DOGE in terms of liquidity and activity. This is one of the factors you should take into perspective before making an investment decision. 

❌ Over-Reliance of the Price Patterns of Bitcoin 

Since its inception as a crypto trading asset in January 2014, DOGE has been following the price patterns of the parent crypto. Dogecoin has followed BTC, other altcoins, and Defi coins to rally and reach new all-time highs. If BTC should hit an unfavourable season due to strong regulation or a huge sell-off by long-term holders of the digital gold, DOGE may plunge into new high lows. 

This time, it may not have the backing of the fans or noteworthy celebrities. Who knows, a new cryptocurrency that provides users with great products may be on the market commanding a great price. 

❌ Infinitely Mineable

Cryptocurrencies such as Bitcoin, Litecoin, and Dash thrive on their final supply cap. That is the main reason why several experts and analysts forecast great trading prices for those assets in the future. Unfortunately, DOGE cannot be spoken in the same bracket. Since it was a joke, a maximum supply of 100 billion came with its creation in 2013. In a little over 2 years of its inception, all the coins had been mined. Instead of allowing supply and demand to take effect and drive the price, the developers decided to add 5 billion coins to the maximum supply annually. 

This took away the important principle of scarcity from the future of DOGE. In December 2020, there was more than 129 billion DOGE out there in circulation. After 5 months in May 2021, due to huge demand, the current coins in circulation are 129,545,137,245 billion. This means that there are no economic fundamentals to define this cryptocurrency and where its future lies in such a saturated space. 

It is extremely important to note that trading and investing in cryptocurrencies come with huge risks. It is highly volatile which has good and bad sides. At Trading Education, we encourage you to use our resource as the foundation for learning more about assets (crypto, stock). Do more research about the potential of an asset before you make an investment decision. 

How to Invest in Dogecoin

There are several cryptocurrency exchanges and brokerages out there which can serve your trading and investment needs. Fortunately, our brokerage of choice, eToro listed DOGE on its platform on Monday, 3rd May 2021. 

eToro provides a user-friendly platform that is easy to navigate. Aside from this, it has the necessary security encryptions to safely and securely hold your coins for the foreseeable future. 

Follow the steps below to complete your purchase of DOGE. 

The first step is to SIGN UP. Kindly provide authentic details of your full legal name, email, and residential address as well as your phone number. 

Note - huge demand in crypto has led to the creation of several illegitimate websites which have run off with people’s money. Providing genuine details would help in the next step of the signing up process.

The second step is to VERIFY YOUR ACCOUNT. With the details provided in mind, you would be made to upload a government-issued identification card that has all the needed information. This process called Knowing Your Customer (KYC) helps prevent fraud (credit and debit), money laundering as well as identity thefts.

The third step is to DEPOSIT FUNDS. eToro has a lot of payment options such as Skrill, Neteller, Debit, and Credit cards among others. Use the option which best suits your needs and upload funds to make the purchasing of your coins possible.

The last step is to NAVIGATE to DOGE PAGE. Purchase the total amount of coins you want. It would be processed and added to your account. 

Conclusion: So is Dogecoin a Good Investment in 2021?

Investments in cryptocurrency are extremely unpredictable. As a result, two factors must be taken into consideration. They are risk and reward. Are the potential rewards in investing in Dogecoin greater than the possible consequence of the outcome? 

Dogecoin has several pros which make it an asset worth buying. Despite its current position as the 4th largest digital asset in the world, DOGE is a long way from commanding the prices of its main market rivals. It’s also not the most used transactional digital currency. 

On the other hand, Dogecoin has been able to break into the mainstream in 2021 forging great partnerships with COVCARE and Dallas Mavericks. Aside from that, it has gained exposure from being listed on eToro and Gemini (two of the largest cryptocurrency exchanges in the world). 

Dogecoin is trading for $0.2218 which is relatively cheaper. This makes the digital asset a great financial instrument for novice investors. The cryptocurrency is also a great asset for experienced investors to include on their portfolio of investments as a shield against potential losses. 

In simple terms, Dogecoin is a risky investment with lots of potential rewards. Embarking on an extensive independent study would be extremely helpful before you consider adding it to your portfolio..  

The real question with regards to investing in Dogecoin is, does it work? If you dedicate a great deal of time and money you can write off as bad debt, the cryptocurrency could surely be the asset that could turn your fortunes around. 

Digital Coin Price estimates Dogecoin DOGE to have a trading price of $0.35 by the end of 2021. If we are to go by the price forecast of experts at the crypto news portal, then Doge is an investment worth buying in 2021.  

Read Also: Will Dogecoin Reach $1?

Will Dogecoin Be a Millionaire-Maker?

Dogecoin could become a millionaire-maker in the future. In a sense, it already is – Dogecoin has a market cap of $64 billion at the time of writing and. Partnerships, integrations, and innovation can set the cryptocurrency up to reach new price milestones in 2021 and the years beyond. 

Experts at Digital Coin Price forecasts dogecoin to have a trading price of $1.02 by the end of 2028. On the other hand, experts at Coin Price Forecast predict a huge price for Dogecoin DOGE in the future. According to the experts, DOGE could have a trading price of $0.67 by the end of 2028. 

With the two predictions of experts at different analytical websites in perspective, dogecoin could become a millionaire-maker in the following ways. 

For simple mathematics, let us peg the price of DOGE at $0.60. At such a price, buying 450,000 DOGE would cost (450,000×0.60), which equals $270,000. In the event the prediction of Digital Coin Price is reached, your $270,000 (450,000 DOGE) would grow to $1,053,000 (450,000 DOGE multiplied by the new price of $2.34). In the process, you’d make a $783,000 profit. 

For the low to middle-income class person, you could also become a millionaire through the process below. 

At the same price of $0.60, buying 60,000 DOGE would set you back $36,000. If the price estimate of Coin Price Forecast is tested, your investment would amount to $1,051,200 (60,000 DOGE multiplied by the new price of $17.52). You’d make a profit of $1,015,200.  

At a market capitalization of $65.93 billion, the next milestone for DOGE is to test is $100 billion which would be facilitated by an increase in price. DOGE could become a millionaire if you take into perspective its current trading price, the amount of money you are willing to risk, and the future price you expect it to trade for.

Now you know the pros and cons of investing in Dogecoin. If you’re feeling inspired enough to start investing in DOGE, or if this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that eToro provides the ability to trade Doge and other crypto assets and CFDs on up to 90+ cryptocurrencies.

eToro – Best Exchange to Buy Dogecoin

eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.

Virtual currencies are highly volatile. Your capital is at risk.

FAQs

What Will Be The Value Of Dogecoin In 2022? 

According to experts at Digital Coin Price, DOGE will exchange hands for $0.35 by the end of 2022. Analysts at Wallet Investor forecast a maximum price of $0.58 on 31st December 2022. CoinPedia estimates DOGE to reach a minimum of $0.99 in the early days of 2022 and could test $2.38 by the year’s end of 2022. According to analysts at Long Forecast, Dogecoin could be trading for a coin at $0.37 on the last day of 2022. 

What Is Dogecoin Predicted To Hit? 

Previsioni Bitcoin believes Dogecoin could hit $0.57 by the end of 2021 for the short term. In the long term, Coin Price Forecast thinks DOGE could test $0.78 by 2032.    

Will Dogecoin Explode? 

Dogecoin could explode in the short or long term. Since its price is not determined by the fundamentals or innovation of its technology, it’s difficult to make a bold assessment of the future of the cryptocurrency. If the fans of DOGE on social media continue to pump the price throughout the year and Elon Musk continues to pass positive comments about the digital asset, it could explode.

Currently, DOGE has an all-time high of $0.7376 and the next price milestone traders and investors look forward to is $1. If DOGE tests $1 in the coming months, then it would surely be on its way towards a great explosion. 

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