There are lots of reasons why you might want to invest in Dogecoin right now. Many think that they have to be a savvy investor with a lot of money — but, with some common sense and research, it’s pretty accessible, even for beginners.
With Dogecoin’s May price rally, it is quite easy to wonder, is it still a good investment? Year-to-date, Dogecoin is up by a very huge margin and is now close to crossing the $19 billion market cap. This makes anyone’s rationale fearful that a correction could be imminent.
Well, there are lots of factors that make Dogecoin quite a good investment even at current price. Here are 8 reasons why you should invest in Dogecoin right now.
If you want to invest in Dogecoin quickly and easily, with 0% commission, check out eToro Exchange!
8 Reasons Why You Should Invest in Dogecoin Today
There are all kinds of reasons why you might want to invest in Dogecoin — probably some you’ve never considered. Here are 8 that we found. And If you are a long-term investor, Dogecoin could be a good investment for you.
1. Dogecoin is loved by the Wallstreetsbets crowd
While not officially endorsed by the Wallstreetbets community, Dogecoin gets regular mentions there. Since it came under the radar of the Wallstreetsbets crowd, Dogecoin grew up by over 12,000% in May 2021. There are a couple of factors that have made this FOMO-driven rally sustain itself longer than any other rally. Some of them are as below:
- The community is determined to make a point
Wallstreetsbets is a lot more than a crowd trying to make money. It is about trying to make a point to the system. These are people who believe that the financial system is rigged. In the process, they have been taking random assets and propping them up.
One of the stocks that have benefited a lot from Wallstreetsbets is GameStop. GameStop was heavily shorted by institutional players due to its weak market prospects. Through aggressive buying, Wallstreetbets was able to squeeze out the shorts and trigger a rally that saw GameStop hit highs of over $350.
This saw some hedge funds take a loss of over $5 billion in just days. Not only has this made retail investors money, but it has also proven that with unity, retail money can hold its own against institutional traders.
- Dogecoin has similarities to GameStop
Well, Dogecoin has a number of similarities to the likes of GameStop. While there weren’t shorts on Dogecoin, it has for a very long time been laughed off as a joke coin.
Think about it this way, in the crypto-verse, coin supply is the gold standard. Bitcoin is where it is because of its low supply that is capped at 21 million coins. There are cryptos with high supply too but are attractive, BNB being a good example. Such cryptos employ a concept called coin burns to keep the supply in check.
Dogecoin is none of that, it is not only inflationary but millions of Dogecoin are mined every few minutes. This means the supply pretty much infinite.
It is also interesting that even its founders considered it a joke coin right from the start. What a better coin to be the poster boy of a rebel investor movement? Like GameStop, the Wallstreetbets crowd has been buying up Doge and holding, and the result of this instantaneous demand has been a surge in its price. So, can it hold? The answer is yes, and that is due to the idea of diamond hands.
What are diamond hands?
If you have been in crypto for a while, then you are probably aware of the term HODL. It simply means that you buy crypto with the idea of holding it for the longest time possible. It’s a concept that has worked perfectly for Bitcoin because it lowers the number of coins available to trade.
The idea of diamond hands is a variation of the same. It simply means that you are buying into an asset that could fluctuate hard in value, but that such fluctuations should not scare you into selling. It is an idea that when implemented in unison, can work. The best example of diamond hands at work was when Robinhood the crypto exchange that is mostly used by the Wallstreetsbets crowd decided to disable buys on GameStop.
This meant that anyone looking to trade in GameStop could only sell. Ideally, this meant that the price of this stock would have collapsed. However, due to the idea of diamond hands, it did not collapse. While new buyers could not get in, the ones already holding chose not to sell. As such, when Robinhood reopened the buy options, the in-flow of new buyers led to a new rally.
Dogecoin has benefited a lot from diamond hands too. Most of the money getting into Dogecoin has come from Robinhood. As such, when the buy option was disabled, the price of Dogecoin would have collapsed. However, with HODLERs staying strong, the price held strong. It then exploded once the system was streamlined again.
2. Robinhood seems to have become more friendly
Still, on Wallstreetbets and Dogecoin, Robinhood seems to have dropped its antagonistic stand to the rebel community. After criticism from multiple quarters including from Congress, Robinhood is much friendly.
This means that new money looking to buy Dogecoin can now do so with ease. With the ever-rising price, FOMO into Dogecoin is now higher than ever. It is a factor that could see its price keep gaining going forward, and possibly test even higher highs. A couple of factors support this analogy.
3. Diamond hands are increasing, and bolder
Back in February last year, Diamond hands were few, and not all of them had faith that this could be pulled off successfully. However, with prices testing new highs, anyone that bought Dogecoin earlier is more emboldened than ever. They know that as long as they do not sell, the price could rise even further.
This is evident in the price action of Dogecoin. Since the later part of April 2021, the price of Dogecoin was on the rise consistently until the summer. Even when the rest of the market experienced a correction, Dogecoin held strong. There was a day when Bitcoin and most altcoins dipped by about 10%, Dogecoin was the only one in the top 10 that remained in the green.
In the second week of May, Dogecoin equally outperformed the entire market and gained by close to 100%. This means anyone who bought Doge about a week before that, doubled their money.
Don't Miss: Dogecoin Price Predictions
4. Dogecoin has the backing of Elon Musk
Elon Musk is adored by retail traders. He is anti-establishment, and he has the money to back it up. He is one of the people that were pro-Wallstreetbets when Robinhood disabled buy orders for certain stocks. Musk is also pro-crypto and has been quite vocal in his support for Dogecoin. You are probably wondering, is the support of one man enough to buy Dogecoin?
Well, yes. Elon Musk is not just anyone, he is one of the richest people on the planet. He also goes all in, in whatever he sets his mind on.
This means anyone who bets against him is highly likely going to lose. For context, Tesla had lots of short-sellers a while back.
Big money players simply did not believe that Tesla could deliver on its orders, and on time. Elon proved them wrong, and this triggered a rally in the company’s price, making him the richest man on the planet. Not only has Tesla delivered on its orders, but it’s also now the largest automaker in the market way ahead of the likes of Toyota.
This is also the guy who is redefining the space industry. He introduced the reusable rocket, and SpaceX is on course to be the first private company to land a human being on Mars.
When a person of such repute is betting on Dogecoin, you can be sure that he knows what he is doing. As a matter of fact, Dogecoin has been on the rise ever since he took an interest in it. Dogecoin’s rally in the past week has largely been driven by expectations that he would touch on it in an upcoming conference. Simply put, if one of the world’s brightest science minds is betting on Dogecoin, it makes sense to buy it now.
Elon Musk has also introduced a long-term perspective to Dogecoin. Last year, he stated that he was buying Dogecoin for his then 10-month old baby. Since a baby does not understand money, it is quite obvious that he did it with the next 10 to 20 years in mind.
This is changing the dynamics for Dogecoin, and many HODLERs could also take a similar view to this cryptocurrency. This is a good reason to buy Dogecoin for two reasons. First, Dogecoin could achieve price stability. That’s because there would be less trading and the number of HODLERs would increase. Price stability is already being experienced in Bitcoin since institutional money started taking an interest in it.
In the case of Dogecoin, this price stability would play a role in drawing institutional players into Dogecoin. Since Elon Musk started propping it up, and the Wallstreetsbets crowd took it up, the number of companies that accept Dogecoin as payment has shot up.
As more of them adopt, and investors HODL, its price will almost certainly keep gaining. It makes sense to buy now and benefit from the long-term price appreciation.
Check Out: Is Dogecoin a Good Investment?
5. Dogecoin has lots of celebrity endorsements
Elon Musk is just one of the high-profile figures that have taken on to Dogecoin. Lots of other celebrities have taken it up too including the likes of Snoop Dog, and Paris Hilton.
So, why is this a big deal? Well, celebrities have millions of followers, and the decisions they make have an influence on their users. That’s why businesses hire them to market their products. In the case of Dogecoin, there are millions of celebrity followers who knew nothing about Dogecoin but now know.
Such people may have already heard of cryptocurrencies, but were unsure of which ones to buy. For such investors, Dogecoin makes for the perfect starting point in crypto. There are a number of benefits to Dogecoin from such celebrity endorsements.
The first one is that it creates liquidity for Dogecoin and this is good for its adoption. That’s because as more people buy and sell this crypto, the action of one buyer or seller will not impact its price. This is what will make Dogecoin perfect for use as a currency. That’s because anyone buying or selling using Doge can be sure that the value of the currency will not fluctuate randomly in the middle of a transaction.
Secondly, with deep liquidity, it becomes easier for investors to get in and out of Dogecoin with ease. With this ease of trading between Dogecoin and other assets, it becomes easier for one to trade between it and other cryptos and other assets.
This too could play a role in drawing institutional players into Dogecoin, further adding to its price stability, and price movements. It’s the perfect reason to buy Dogecoin, now with the next few years in mind. Besides, as its price rises, more celebrities are likely to endorse it, creating an upward price pressure.
6. Dogecoin’s developer team is back on the stage
A cryptocurrency is as good as the developer team behind it. The more active the core developer team is, the better it is likely to perform long term. That’s because they can do improvements that make the cryptocurrency more adaptable to the changing market needs.
They can also handle issues such as security, which is critical to the long-term growth of any cryptocurrency. For context on why a good, and active developer team is important, one needs to look at Ethereum.
For a while now, Ethereum has been dealing with a scalability issue that had made it almost impossible for developers to develop Dapps on the network. The gas fees were also making it almost impossible for investors to come up buy Ethereum, especially in small amounts.
However, the team changed this through a fork that changed how gas is computed on this network. This opened up the network, and the results were evident in the price action of Ethereum when that happened.
Dogecoin’s developer team has been dead for quite a while. In fact, it was never serious from the very start. This is evident in the sentiments of one of its founders.
He stated that the coin was just a joke, and should be treated as such. However, since people like Elon Musk started pumping it up, the developer team is back.
Not only are they taking care of the network, but also doing improvements to make it work better. This is likely to inspire confidence in investors who may have perceived Dogecoin as a joke all through. For this reason, it makes sense to buy Dogecoin today.
7. Dogecoin’s inflationary nature is an advantage
The whole behind cryptocurrency was to replace fiat with decentralized money. Bitcoin, the first cryptocurrency, failed on this front. Its purpose is now tilted towards being a store-of-value.
The reason why Bitcoin and others are failing on this front is that they are deflationary. Bitcoin, for instance, has a capped supply of 21 million. As more people buy and hold it, the amount left for everyday transactions becomes ever scarce. There are a number of reasons why deflationary currencies may never work as currencies.
- Deflationary currencies discourage spending
An economy works because people spend money. This creates demand for goods and services, and by extension, wealth creation. This cannot happen with deflationary money because there is no incentive to spend. For context, the person who bought Pizza with 10k bitcoins in 2014 looks stupid today. Ideally, they shouldn’t look stupid because the essence of money is spending. However, since bitcoin is deflationary, its price is guaranteed to trend up long term. This eliminates the incentive to spend and becomes money in the true sense of it. Besides eliminating the incentive to spend, it creates price volatility as has been the case with Bitcoin since its launch.
- Deflationary currencies increase the real value of money borrowed
Imagine you owed someone one Bitcoin last year when it was trading at $20k. In a few months, the debt is now worth $55k, and you have to pay more. This makes it quite impractical to borrow and lend in a deflationary currency. This is not the case with inflationary money because the value tends to grow in value in a more linear and predictable trajectory.
- Deflationary currencies create real wage unemployment
With a deflationary currency, the increase in the value of a currency means that employers would not afford labour. That’s because employees in most cases are not open to the idea of taking a nominal wage cut. The result would be job cuts that could negatively impact the economy. This makes such currencies quite counterproductive to economic growth and development.
With all these problems, it is quite evident that inflationary crypto is the future of money. Dogecoin is one crypto that fits the bill. Millions of Doge enter circulation every hour. But one wonders, is there a point in investing in an inflationary cryptocurrency? Well, the answer is yes.
Just because more is coming into circulation does not mean that its price can’t rise. Price increase or decrease is a factor of the number of transactions and not so much the total in circulation. Proof to this is the price of Dogecoin since its inception.
In all past market rallies, Dogecoin rallied alongside the rest of the market. In fact, it held its value better than most altcoins in the crypto crash of 2017. With the visibility it has gained recently coupled with its inflationary nature, Dogecoin adoption is pretty much guaranteed. This makes it the perfect cryptocurrency to buy now for transactions and speculation.
8. Dogecoin is now a first-tier cryptocurrency.
Where a cryptocurrency ranks in market capitalization rankings matter a lot, it makes a cryptocurrency attractive to new investors looking to bet on the market.
Today, Dogecoin is an elite-level cryptocurrency as ranks tenth by market cap rankings, with a market capitalization of $20 billion, Dogecoin is now worth the same as top biotech companies like. Such metrics make anyone getting into the market today want to take Dogecoin seriously.
Not only will this deepen its liquidity, but it will also drive up its price momentum going into the future. This in itself is an excellent reason to hold Dogecoin today in anticipation of more gains in the long run.
From the above, it is pretty clear that Dogecoin is a good investment. It has the backing of people who matter, such as billionaire Elon Musk. It has also become the poster child of rebel investors led by the Reddit group Wallstreetbets. Most importantly, this crypto is inflationary, which makes it perfect for everyday transactions. This can open up its adoption in the long run as an everyday use currency.
That said, it is always good to approach the market rationally. With the market, this high, leveraged trading should be used with caution. That’s because any slight correction in the price of Doge could wipe you out. Small corrections, in this case, can even mean a 50% correction. After a 12000% increase in price, such would be negligible. Other than that, the momentum is the upside.
eToro – Top Cryptocurrency Platform 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.