Many top investment analysts will advise you to invest in Dogecoin. The cryptocurrency has become very popular among investors in the industry because of its excellent performance and resilience in the market. You need a solid cryptocurrency investment that can stand the test of time, and at the moment, Dogecoin is one of the best options out there.
You can’t miss the Dogecoin on exchanges or media news because of its unique icon, which features a Japanese Shiba Inu dog breed that always seems to be excited. From what we know about Dogecoin, there is plenty to be excited about.
Why is Dogecoin so popular among investors?
The cryptocurrency’s popularity has increased for many reasons. One of the winning strategies that have made Dogecoin a favorite for many crypto investors is its endorsement by one of the most influential investors in tech – Elon Musk. Investors did not need any other incitement to buy and hold Dogecoin after hearing Elon Musk speak so brightly about it. Elon Musk has pitched his tent with Dogecoin instead of other options such as BTC or ETH.
Another reason why the cryptocurrency gained fast popularity in the market is the quick rate at which its value is appreciated. Within a month, Dogecoin had recorded a whopping appreciation of about 1000%. It was such a fascinating trend to watch. The crypto experts and financial analysts we recognize have set their focus on Dogecoin, inspiring more people to focus on it.
Are there investment risks with Dogecoin?
As expected with the cryptocurrency market, risks always exist. Think about it. There is no investment that is worthwhile and free of risks. This means you should be careful when investing in Dogecoin rather than following the crowd blindly. Thankfully, there are so many ways you can examine the coin’s performance in the market to know when it is time to buy or sell.
The use of Dogecoin as a method of payment for goods and services has boosted its profile in the market. When more people use Dogecoin for transactions, the coin’s value appreciates making it less risky as an investment. Which also reduces the risks for you as an investor.
For many investors, the focus is not on how much they can gain by investing in Dogecoin. Instead, the investors get a thrill from the unpredictable performance of the cryptocurrency.
Investing in Dogecoin
Dogecoin has come a long way in the crypto market. It was created to be a fork for the Luckycoin, which is also a fork for Litecoin, which we all know. Over time, Litecoin has been upgraded to accommodate its capacity as a fork for BTC. These software upgrades have also been done for Dogecoin, with the last major update recorded in 2019. Even with its humble history, investors who held on to their Dogecoins have become wealthy.
So from its history, we can say Dogecoin was not created to become a money-spinner to make investors wealthy, but the story has changed. Jackson Palmer and Billy Markus created Dogecoin by copying the BTC source code, with a few changes. This happened in 2013. Since that time, the value has slowly appreciated. However, Billy Markus, a co-founder, sold his stake in the coin and bought a car in 2015. If only he had known that a few years later, his creation will become very valuable.
In 2018, the Dogecoin market value exceeded $1 billion, and in May 2021, the market cap went higher than $88 billion. The project has become bigger than the founders, who now play a minimal role in its affairs. However, some analysts have pointed out that it is essential for the founders to play a significant part in growing the coin and to make it stable. Now, Dogecoin thrives on its community and the developers working tirelessly behind the scenes to facilitate trades and business deals with the cryptocurrency.
How demand for Dogecoin can be sustained
The driving factor that can establish Dogecoin as stable crypto in the market is demand. In the first days of its existence, members of the Dogecoin community earned coins for commenting and answering questions from other members of the community. Next, the coin was introduced to the public as a means of exchange during purchases.
Establishing Dogecoin as a cryptocurrency that can be used to make purchases was a strategic move that increased demand significantly. The coin is now used by community members and other investors to purchase tickets to attend entertainment or sports events or buy things online. Also, people have given Dogecoin donations to charity events, increasing the wide acceptance of the coin in public. And recently, we could buy Tesla products with cryptocurrency. With Elon Musk’s support, it is expected that solid plans will be implemented to enable everyone to buy their favorite Tesla models with Dogecoin.
How it works
Transactions done with Dogecoin are processed and confirmed by miners who use a Proof of Work (PoW) consensus algorithm. The PoW consensus algorithm used, is quite different from the BTC Blockchain. Averagely, it takes about a minute to complete Dogecoin transactions on the Blockchain, which makes it more preferable in the market. Users have made it known that they prefer to trade with Dogecoin because of the fast transactions. And thanks to the Blockchain, transactions done with the Dogecoin are safe.
Threat of inflation
There is an infinite supply of Dogecoin, with an annual cap of 5 billion, which the experts have described as a potential source of inflation in the crypto market. Other cryptocurrencies such as BTC, have supply caps to check inflation. BTC has a supply cap of 21 million. In the case of Dogecoin, the records show that 10,000 Dogecoins are made by the minute. In one day, a total of 14 million Dogecoins are created. What this means is that the core development team must develop more ways to increase demand and maintain the cryptocurrency’s stability.
In conclusion, it is obvious that the public has accepted Dogecoin. The market trends show the crypto has a good future. More changes and development are expected soon. And with growing interests from different reputable brands, Dogecoin should maintain its status as one of the most desired cryptos in the market.