The tremendous potential and value in cryptocurrencies is undeniable, thanks to blockchain technology. What started with a single digital currency called Bitcoin (BTC) has evolved to be a multi-trillion dollar industry promising endless opportunities. Dogecoin (DOGE), for instance, has gained unprecedented fame in recent times. The coin has outperformed several top crypto assets to become the tenth-largest cryptocurrency by market cap at the time of writing.
Dogecoin saw a 3200% increase within last year. It started its journey in 2021 with a price of $0.0099 and kept climbing up till it hit an all-time high of $0.73 in May 2021. And while the price has since dropped from these levels, Dogecoin still displays signs of promising growth that might make previous price predictions come true in the future.
While the coin presents an excellent opportunity for usage, you need to understand what exactly Dogecoin is, how it works and what it offers to investors.
What is Dogecoin (DOGE), and Why Invest in It?
Dogecoin is a famous cryptocurrency that was created back in 2013 as a joke. DOGE was built to introduce the general public to the world of blockchain and cryptocurrencies. From the start, the coin had many advantages going for it. Doge became popular because of its meme status.
The infamous coin is made from a fork of the Bitcoin blockchain. Its status as a meme-coin quickly garnered public attention. Eventually, it even won over the trust of investors, who realized that it was not merely a Ponzi scheme like some other coins in the market at the time. Additionally, Doge had (and continues to have) a low entry cost, as Doge tokens barely cost a few pennies. However, as the popularity of Doge increased, so did the demand and supply.
Similar to all first-generation cryptocurrencies, Doge is pretty basic in its functionalities. At the time of its inception, offerings like smart contracts and staking did not exist. For these early crypto assets, the prime focus remained on building a secure network.
Dogecoin is a peer-to-peer (P2P) and open-source digital asset. It utilizes a Proof-of-Work (PoW) consensus mechanism like Bitcoin and Litecoin (LTC). Essentially, Doge uses public and private keys to allow users specific access to data on the blockchain. It can also be mined, just like LTC and BTC.
Despite these similarities, Dogecoin has many features that make it stand out from other mainstream cryptocurrencies. For example, there is no limit to the supply of DOGE, unlike Bitcoin, whose supply is capped at 21 million coins. Several other crypto assets have such supply limitations.
So, rather than trying to beat inflation like other virtual currencies, Dogecoin depends on it. In other words, new DOGE coins can still be mined even if their value has dropped. These new coins will replace the lost ones to sustain a steady supply of about 100 million active Dogecoin tokens.
This mechanism works well for Dogecoin because the coin holders treat it more like fiat currencies. The meme cryptocurrency is widely accepted as a medium of exchange as opposed to an investable asset like Bitcoin.
Dogecoin provides investors with a variety of advantages over conventional investments. Some of these advantages include:
1. Dogecoin's Vibrant Community
Doge has various use cases, and the coin's community has played a crucial role in its surging popularity. DOGE is used to tip several content creators on social media platforms depending on the kind of content they generate on various subjects.
In 2013, millions of Dogecoins were stolen in a hack, prompting the community to create a "SaveDogemas" campaign to help those who lost their holdings. A month later, all losses were covered through this initiative. The coin has also been involved in many social causes. DOGE was used to raise a total of $50,000 for a Bobsled Team from Jamaica for the 2014 Winter Olympics held in Sochi, Russia.
Apart from this, Dogecoin has also been used to sponsor athletes. For instance, Shiva Keshavan is an athlete who benefitted from the fundraising efforts of the meme currency. In March 2014, DOGE was used to sponsor the NASCAR driver Josh Wise through a fundraising effort that generated $55,000. Being involved in these humanitarian causes has brought mileage to DOGE. Although it is a joke currency, such projects have drawn investors and traders close to the asset.
2. Popularity Among Celebrities
Dogecoin is highly influenced by what people are saying about it. One of the pros of this coin is its fans across social media networks such as Reddit, Twitter, and Facebook, who positively influence the price. For example, on 1st April 2021, Elon Musk tweeted that SpaceX plans to put Dogecoin on the moon. The coin opened on 1st April 2021 at a trading price of $0.05365, reached a peak of $0.07011, and closed the day at $0.06199. It ended the day with a trading volume of $5,816,046,822. On 31st March, DOGE had recorded a trading volume of $653,389,282. This marks an increase of over 790% in just 24 hours.
Elon Musk is not the only admirer of Dogecoin. Celebrities like Gene Simmons and Kevin Jonas have also endorsed the value of Dogecoin through social media posts and tweets. Given its global adoption and high popularity on the internet, Dogecoin may go close to the $1 mark very soon.
3. Surging Support From Exchanges And Trading Volumes
Dogecoin was already trading on some of the most popular crypto exchanges and brokerages. In early May, it has seen additional new listings. Multi-asset brokerage eToro showed its support for the cryptocurrency and attributed the addition to strong client demand. eToro has a customer base of over 20 million. Through this listing, DOGE has attracted more investors to its current user base.
Crypto exchange Gemini also listed DOGE last year. Gemini users currently have DOGE as an investment option. In addition to boosting the trade volumes and market capitalization of DOGE, the Gemini addition also helped DOGE reach a new all-time high of $0.7376 recorded on 8th May 2021.
With more such collaborations in the pipeline, especially Coinbase, the future looks bright for this booming cryptocurrency. If Coinbase lists DOGE, the digital asset could gain further exposure and contribute significantly to the overall valuation.
DOGE's trading volume has also surged significantly in recent times. At the time of writing, the coin's trading volume is $1,192,243,809.
Why This is The Best Time to Buy Dogecoin: Final Thoughts
Dogecoin has been on an exciting journey. It started as a fun concept but then evolved into a serious project, donating hundreds of thousands of dollars for social causes. Only time can tell when DOGE is going to break out, but if it is anything like the last few explosions, it will be a historical event.
Like all cryptocurrencies, Dogecoin is competitive and is a safe bet for investors who wish to utilize short-term market changes for their benefit. With all the support from its community and fan base, Dogecoin reaching the $1 milestone seems to be just around the corner. All these reasons point to the fact that it is now the right time to buy DOGE.
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