Understanding Dogecoin (DOGE)
The revolutionary blockchain technology has led to the flurry of cryptocurrencies in financial markets, and Dogecoin is one of them. The virtual currency is the first of a kind featuring a logo inspired by Doge’s Internet meme, featuring a Shiba Inu dog.
The crypto coin was created by computer programmer Billy Markus and introduced by marketing professional Jackson Palmer on December 8, 2013. Both Markus and Palmer envisioned making Dogecoin a Bitcoin alternative in terms of usability and accessibility.
Built on blockchain technology, Dogecoin is based on LuckyCoin, which utilizes the Scrypt codebase of Litecoin. Dogecoin’s price stands below a dollar, making it a suitable investment for small investors. The low asset value allows the Dogecoin community to use it as an online tipping currency. With that said, Dogecoin can be used to make peer-to-peer transactions for buying, selling, or trading. The uncapped coin supply makes it inflationary.
This guide explains factors driving the success of Dogecoin together with price prediction for 2021 and reasons for whether it is a worthwhile investment.
Is Dogecoin worth buying?
Nearly 128 billion Dogecoins are in circulation at the time of this writing. At the time of launch, the developers promised to inject around 5 billion Dogecoins into the market each year. With a market capitalization of over $7 billion, Dogecoin joins the top 12 cryptocurrencies in the market.
Dogecoin is an inflationary virtual currency, which means that there will be no shortage of it ever, and the supply will be stable. But the major drawback of this feature is the high inflation rate that might result in investors getting lower than expected returns more often. Furthermore, the currency was hit by a price blow in 2018, with investors showing little interest in Dogecoin. Another thing that might make potential investors reluctant is the departure of Markus from the ambitious project.
On the positive side, the cryptocurrency has a vibrant community that supports online content creators and charitable causes by donating Dogecoins. Besides, the miners involved with confirming and approving the blocks get a handsome 10000 DOGE, much more than most leading cryptos. The price gain achieved by Dogecoin results from high volatility, which makes it quite unpredictable.
With all of this happening, several institutional investors and celebrities have recently come forward in favor of Dogecoin, including Tesla CEO Elon Musk and rapper Snoop Dogg, helping the coin to grow in value to record levels. Believing this price change to stay positive for years to come, Dogecoin’s investment could be profitable. However, some experts have expressed concerns over influencers promoting Dogecoin that pushed its value, saying investors must invest based on the coin’s performance rather than anything else.
Will Dogecoin go to the moon?
Dogecoin is fun crypto, which due to its constant promotion by Musk about his SpaceX rocket, is more often related to the crypto phrase ‘to the moon’ coined by singer Gene Simmons.
The growth in the value of the meme-based cryptocurrency has been phenomenal, especially after the debate over the Reddit SatoshiStreetBets forum. Like another Reddit r/WallStreetBets forum did in GameStop stock GME, the SatoshiStreetBets forum members asked others to invest in Dogecoin to help it grow in value. It led to an impressive price change of 400%, or an all-time price high of 7.2 cents.
No sooner than later, Musk posted tweets endorsing and buying Dogecoins that sent its value to the moon. This price explosion prompted many retail investors to invest heavily in Dogecoin and reap the benefits. Even Palmer once said that despite no software updates in years, a significant portion of the crypto market cap is captured by Dogecoin. Though the price dropped slightly after that, it stayed steady for most of the time.
Dogecoin price prediction for this year (2021)
The developments observed in late January and early February 2021 encouraged a sudden influx of cash in Dogecoin, improving its performance against the US dollar. With that said, making any prediction about the volatile crypto is like shooting an arrow in the air that could go anywhere. But considering high-profile celebrities like Musk favoring Dogecoin and its record-breaking price rise this year, 2021 could be a bullish year for the digital currency.
Why is 2021 the best time to invest in Dogecoin?
The overall performance of Dogecoin in the first two months of the year indicates that 2021 is the best time to invest in it. The gains are enormous, and a few analysts expect the coin to outperform Litecoin in value if the current trend continues. Not to mention it all depends on how long celebrities keep supporting it. Crypto experts will guide you with full-depth details about the dogecoin forecast that can help you gain more profit. So stay tuned to us to know more.
Final Thoughts
Dogecoin aims at catering to the last member standing in the blockchain community by being cheaper in value and unlimited in supply. At the same time, it targets building a passionate crypto community instead of competing with the likes of Bitcoin. Despite experiencing bearish and bullish market trends over the past few years, Dogecoin has survived the intense competition in the crypto sphere. And given the price turbulence created by Musk and Reddit users, Dogecoin seems an enticing investment opportunity.
