Cryptocurrencies have been on a roller-coaster ride over the past several years, making investors indulge in a merry-go-round situation in anticipation of some positive trends of their purchased digital currencies. While Bitcoin has been enjoying the prime position ever since its launch, various other cryptocurrencies are now trying hard to catch the pace. Of all the different coins racing to reach the top spots, one that has pleasantly amazed investors and crypto enthusiasts alike is Dogecoin.
This meme-inspired coin was launched as a spoof to poke fun at altcoins. Little did people know, it would make its way among the top ten cryptocurrencies worldwide. What gave Dogecoin the much-required hype and popularity it commands today is words of support or encouragement from business titans like Elon Musk. Ever since Elon Musk started tweeting in Dogecoin’s favor, its value has skyrocketed at an unprecedented rate.
A quick look at Dogecoin price in India today will show you how far this cryptocurrency has come in terms of value. But is it enough a reason for investors to bet big on Dogecoin? This is one cryptocurrency whose journey has been quite amusing. To help investors get a pulse of this currency, we’ve shared below some essential information necessary to gain a thorough understanding of its current and future prospects.
Returns worth Noticing
Globally, governments continue to restrict free movement in the wake of COVID’s new variants, businesses are struggling hard to operate at their maximum and absolute best. It has left various investors fretting over the excessive stock valuation in the market, primarily due to the weak business prospects. Ever since COVID-19 wreaked havoc in the business world, equity markets have struggled to give positive returns. On the other hand, cryptocurrencies managed to generate impressive returns for many of their investors.
If you check the last calendar year’s market performance, Bitcoin’s alone gained a lower 94% in 2021. The Bloomberg galaxy cryptocurrency index has also witnessed a gain of a whopping 272% since the beginning of 2021. For those who don’t know, the Bloomberg galaxy cryptocurrency index helps track the real-time prices of highly traded digital currencies in US dollars. The total returns in the crypto index were primarily led by Dogecoin, which was 9,940% in 2021. Dogecoin was certainly on a roll the last calendar year, and it resulted in its valuation or market capitalization jumping from $ 1.07 billion to $ 62 billion.
What’s the Whole Fuss & Hype around Dogecoin?
Launched in December of 2013 as a fun alternative to Bitcoin, Dogecoin was created by Billy Markus and developed by Jackson Palmer. This crypto asset was based on Luckycoin, which was primarily based on Litecoin. Experts explain Dogecoin as an inflationary leisured exploration of community-building around the crypto-asset rather than being an alternative deflationary numismatic instrument. Dogecoin is a digital currency whose use is limited to crowdfunding social causes, giving online tips, etc. However, seeing its unexpected growth, its developers are working on some serious upgrades, which might perhaps increase its use cases.
The primary difference between Dogecoin and other cryptocurrencies is the total number of coins. While most top cryptocurrencies have a cap on the limit of coins that can be issued in the market, it is not the case with Dogecoin. It means people can indulge in Dogecoin mining as much as they want and create endless Dogecoins. Though there is no pre-disclosed limit on the number of Dogecoins that can be created, there is a cap or maximum limit on the number of coins that can be launched in the market in a particular year.
While altcoins like Ethereum, Binance Coin, Ripple, and others started racing higher in the last calendar year, Dogecoin also joined the rally. In fact, Dogecoin emerged as one of the best performing cryptocurrencies, thanks to the tweets done by Elon Musk.
Things Investors Should Keep in Mind
While all cryptocurrencies, like Bitcoin, Ethereum, etc., are highly volatile and speculative investments, Dogecoin is a little riskier than most. It is one digital currency whose entire valuation depends on peoples’ perception of it. For example, Dogecoin’s price skyrocketed when Elon Musk tweeted in its favor, but the same saw a dip when Elon was heard saying that Dogecoin was a “hustle.”
Luckily, the cryptocurrency’s price was stabilized again when Elon issued a statement on his Twitter profile that he would launch “DOGE: 1 Mission to the Moon” somewhere in early 2022, a mission fully funded by Dogecoin. Seeing these instances, it can be assumed that Dogecoin’s valuation can be significantly increased or decreased based on a single piece of information put out in the market.
While there are investors who have reaped humongous profits from short-term and long-term holdings of Dogecoin, you would not want to take a lot of risk as a beginner or a safe player. Dogecoin might be touted as the currency of the future; one should not go all out spending on this digital currency. A wise rule is to start small, understand the market, scale accordingly, and tweak according to your portfolio requirements.
Always Trade on Reliable Crypto Exchanges
Now that you’re aware of the information needed about Dogecoin, you can go ahead trading carefully. And not to forget, whenever you buy, sell, or store Dogecoin, always use trusted crypto exchanges and wallets for the same. It will make your entire cryptocurrency trading experience a pleasant one.