- Crypto markets have gained a lot of value in a very short time.
- Cryptocurrency is a digital medium of exchange based on blockchain technology, which is also totally encrypted and decentralized.
- There are some of the main cryptocurrencies that are very well known, such as Bitcoin and Ethereum.
- But there are still up to 5000 different cryptocurrencies that are present as per CoinLore.
- After the enormous return given by Bitcoin and Ethereum, there are a lot of investors who are willing to invest in these types of currencies.
- Nowadays, it is the Dogecoin that is getting all the attention from the investors.
- A lot of people are investing in this currency with the mere hope that it will be the second bitcoin of the crypto market.
What is a Dogecoin?
- Dogecoin is a cryptocurrency that was invented by the software engineers Billy Markus, who works at IBM, and Jackson Palmer, who works at Adobe.
- They decided to create a payment system that is instant, fun, and free from all the traditional banking fees.
- This currency features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake.
- As it is a cryptocurrency, it is decentralized, which means that you can directly transact between two parties without involving banks or any other intermediate authority.
- Also, it is a digital currency, and hence the physical representation of the currency is not available.
History of Dogecoin
- Dogecoin was officially launched on December 6, 2013, and within the first 30 days, there were over a million visitors to Dogecoin.com.
- Now it has reached a market capitalization of $5,382,875,000 on January 28, 2021.
- On December 19, 2013, Dogecoin surged nearly 300% in just 72 hours.
- This hike was when bitcoin and other currencies were reeling from the decision of China to enter into the bitcoin economy.
- After 3 days, Dogecoin tanks 80% due to large mining pools exploiting the small amount of computing power required at that time to mine the currency.
- In January 2014, the volume of dogecoin crossed the bitcoin volume, but the market capitalization relatively remained low as that of bitcoin.
- In 2018, during the cryptocurrency bubble, Dogecoin reached a mark of $0.017/coin.
- At that point, it had a market capitalization of $2 billion.
- In July 2020, the price hiked again because of the TikTok trend, which also aimed to get the coin price to $1.
- On April 16, 2021, it hit an all-time high of $0.45 with a very huge volume.
- At this time, Dogecoin is the 5th highest cryptocurrency out of all the currencies in terms of market capitalization.
Why is it risky to invest in a Dogecoin?
These are some of the main practical reasons that make it risky to invest in Dogecoin.
Some of the main reasons are as follows:
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Technical aspects
- The growth of the dogecoin is mainly because of the smart investors.
- This growth is not sustainable because it does not have a well-developed team for the development of the coin.
- When you analyze the chart of the dogecoin, you will get to know about the frequent spikes in the chart of the dogecoin.
- This will indicate that the growth of the currency is not sustainable.
- An investment in the dogecoin should be considered a very risky investment at this point.
- You can invest here only if you have a more risk-taking ability.
Cyber-attacks
- On December 25, 2013, a major cyberattack happened in which millions of Dogecoins were stolen from the cryptocurrency wallet platform, which was named the Doge wallet.
- The hacker entered into the file system of the platform and modified its send/receive page to send the coins to the static web address.
- There was also a sudden rise in the tweets about the Dogecoin due to the hacking incident.
- This event was a negative one, but with this, this currency became the most popular altcoin on Twitter.
- Due to this breach, many people lost their funds in Doge's wallet.
- By looking at this incident, there will be a possibility that these types of attacks can again happen in the future, as this currency is totally digital and decentralized.
Social media influence
- This is the main reason that makes the Dogecoin investment a risky one.
- The main reason behind the popularity of Dogecoin is social media.
- You may have observed that whenever there is an event related to dogecoin on social media, the price of this currency spikes.
- There was a hike in the price during the TikTok trend and again a hike in February 2021 because of the encouragement from Elon Musk.
- This indicates that the growth of Dogecoin is widely due to social media.
- As per the basic rule of investment, you cannot invest in something for the long term that is popular because of the social media platforms.
Conclusion
Majorly, all the cryptocurrencies are a big bubble.
Frequently Asked Questions
Q1) Is Dogecoin a good buy?
It is pretty much worthless.
Q2) When did the cryptocurrency crash?
January 2018 is when the cryptocurrency crashed.
Q3) Which crypto will boom in 2025?
Ethereum crypto will boom in 2025.
Q4) Can Bitcoin go to zero?
It is extremely unlikely to happen.
Q5) What is the next bitcoin?
Ethereum is the next Bitcoin.
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