About three years ago, Dogecoin (CRYPTO: DOGE) was on an incredible journey “to the moon”. The dog-inspired token had won over speculators during the meme stock mania and reached its peak price of under $0.74 in May 2021.
Dogecoin has been in a downward spiral ever since, even as the overall cryptocurrency market continues to recover. As of this writing, the token is 78% below its all-time high.
Maybe the Bulls are hoping better days lie ahead. Should you buy Dogecoin now while the price is below $0.20?
Renewed interest
The crypto market is once again convincing investors. Those of the industry Market capitalization is at $2.4 trillion as of April 23, an increase from around $800 billion at the start of 2023. The monumental rise of BitcoinAnd ether to a lesser extent, it drives profits.
Dogecoin significantly underperformed these two top cryptocurrencies last year. But it is winning the race in 2024 and is up 79% so far this year.
It is really difficult to determine what is causing these huge price fluctuations related to digital assets. One such catalyst could be the belief that after the approval of Explore Bitcoin ETFs, more approvals could be on the horizon. Another catalyst could be that X, formerly known as Twitter, could integrate Dogecoin as a payment mechanism into the social news app. In theory, this would increase demand for the DOGE token and drive up its price.
However, anticipation for this potentially groundbreaking result appears to be waning. Dogecoin plunged 27% in April. Extreme volatility is the order of the day as various hype cycles can come and go quickly.
Questioning the usefulness of Dogecoin
Dogecoin was created in 2013 as a fun-loving alternative to Bitcoin. That was exactly the purpose. So it’s pretty incredible that today it has become the eighth most valuable blockchain network with a market cap of $23 billion.
This was done with virtually no real benefit. To be clear, the fact that there is a community of strong supporters is valuable in itself. But as time goes on, I think the excitement will eventually wear off. Using Dogecoin to send payments on X is a step in the right direction.
However, I think this suggests that Dogecoin has minimal chances of long-term survival in its current state. In other words: I think there is a significant non-zero percentage probability that the price of this token will eventually go to zero.
Until now, the crypto space has been viewed primarily as a speculative playground. And why shouldn’t it be like that? With prices skyrocketing in no time, people want to join in to get rich.
However, if we look to the future 10 or 20 years from now, the cryptocurrencies that survive and thrive will be successful and provide real-world utility. Ethereum seeks to eliminate the need for intermediaries in a variety of industries and has a comprehensive ecosystem of decentralized applications. Bitcoin is attempting to become a major competitor to the current monetary system, with compelling properties that make it a superior store of value.
Compared to these two industry heavyweights, Dogecoin appears to be a worthless project. Even though the price is far from its record high of three years ago, I think investors should stay away from Dogecoin as much as possible. Consider owning Bitcoin, Ethereum or one of the many others Growth technology stocks If you have a higher risk tolerance right now, you should do some research.
Should you invest $1,000 in Dogecoin now?
Before you buy Dogecoin shares, consider the following:
The Motley Fool Stock Advisor The analyst team has just identified what they think this is The 10 best stocks so investors can buy it now… and Dogecoin wasn’t one of them. The ten stocks that made the cut could deliver huge returns in the years to come.
Think about when Nvidia created this list on April 15, 2005… if you have $1,000 invested at the time of our recommendation, You would have $506,291!*
Stock Advisor provides investors with an easy-to-follow roadmap to success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks per month. The Stock Advisor has service more than quadrupled the return of the S&P 500 since 2002*.
See the 10 stocks »
*Stock Advisor returns from April 22, 2024
Neil Patel and his clients have no positions in the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
Should you buy Dogecoin while it is still below $0.20? was originally published by The Motley Fool