We live in an era where markets are controlled by memes, communities and inflated expectations of retail investors (or day traders, to be precise). Here, I am not only talking about crypto markets because of some altcoins but stock markets as well. This year, the case we have seen with GME (GameStop) and some other penny stocks is enough to prove it.
We all know that crypto markets are more volatile than any other market. For example, we saw a cryptocurrency like Dogecoin rally from $0.004 to almost $0.40 (at its all-time high) in just four months, a nearly 10000% rise in the price from 1st January 2021.
If we consider that, then a person would have ended up with 100 times their original investment if they had invested money on 1st January 2021.
Also read: How to Buy Dogecoin in India
Dogecoin, which started as meme crypto in 2013, is now suddenly worth $42 billion and ranks in the top 10 list of cryptocurrencies. If we compare that market cap, it’s more than some popular cryptocurrencies like Cardano, Polkadot, Litecoin, Chainlink and VeChain.
A meme cryptocurrency with a circulating supply of 129,237,971,710 (as of writing this article) is chasing a market cap of $50 billion.
Also read: 5 Best Crypto Exchanges in India
The simple answer is celebrities and Dogecoin’s reference to the famous Shiba Inu dog breed or a viral internet meme known as “doge”.
If you are on Twitter, you know that the prices are so volatile because of Elon Musk. Just a single tweet of his can completely change the market’s direction, and these days Dogecoin seems to be his favourite cryptocurrency.
To learn the answer to this question, we have to understand every aspect of this cryptocurrency.
Dogecoin is a cryptocurrency that relies on the hype for its price to surge. There are no technicalities to it. Yes, it could go to $1, but a downfall is also an equal possibility. It’s tough to say or predict where Dogecoin will go.
You should only invest as much as you are comfortable with. Yes, that’s a blunt answer, but that’s the simple explanation to it. You should never go and invest more than the amount you can afford to lose. To sum it up, it’s a very risky investment.
Note: This article or any part of it is not financial advice. The aim is to educate readers. Investors are advised to invest at their own risk.