Should I Buy Dogecoin? 5 Things You Should Consider

Should I Buy Dogecoin? 5 Things You Should Consider

By Motiur Rahman - min read
Updated 14 August 2023

Dogecoin is one of the many altcoins that came into existence after Bitcoin. The developers Jackson Palmer and Billy Marker developed this coin as a joke mimicking a meme that featured a Japanese dog breed called Shiba Inu. The coin later gained popularity and began growing in value as both a digital currency and an investment.

Dogecoin is currently ranked number 12 on Coinmarketcap, with an impressive market capitalisation of more than $22.8 billion. Despite being a meme coin and having no real tangible value, there are still a few reasons why you should consider having this coin as part of your crypto investment.

Keep in mind that all cryptocurrencies are volatile. That means that they are prone to sudden market swings. You should only invest that which you would be willing to lose. Additionally, make sure you carry out intensive and extensive research before settling on any coin. That said, if you’re asking yourself “should I buy Dogecoin”, here are five reasons why.

1. Dogecoin is popular

Since its inception in 2013, Dogecoin has significantly grown in popularity. In fact, it is arguably the most popular coin after bitcoin. On social media, this coin has a growing list of followers. For instance, it has more than two million followers on Reddit, and the number is growing.

Cryptocurrencies have the tendency of growing in value as they attract more supporters and users. Their value is pegged on the number of people that believe in its use and value. On those metrics, Dogecoin is doing fine.

Additionally, it has not only had the support of random individuals online but also of high profile personalities such as Tesla’s CEO Elon Musk, Paris Hilton and the popular hip hop artist Snoop Dogg. Such personalities have millions of followers some of whom may get an interest in cryptocurrencies and particularly in Dogecoin, and push its demand higher. The more its demand spikes, the higher its price will be.

Considering that all cryptocurrencies are speculative in nature, their popularity plays an integral role. Dogecoin’s growth has been spurred by this popularity. If those investing in it continue doing so and continue believing that it will grow in value, then it is more than likely going to grow. The more the hype, the more the growth. Dogecoin is still popular, so investing in it now could be a good idea. However, you should keep an eye on the market just in case another coin starts becoming more popular.

2. Dogecoin is highly liquid

Liquidity refers to the ease with which a particular commodity or an asset can be converted into cash. This also applies to cryptocurrency or digital coins. The ease with which a coin can be transformed into cash is its liquidity. It is easier to make profits with a highly liquid coin since you can easily buy and sell the coins and take advantage of opportunities for making gains. It is easier to enter and exit trades when the market is highly liquid.

Determining the liquidity of a digital coin is easy. You can simply refer to the various exchanges that list that particular coin and check its trading volume. Looking at Dogecoin, it recorded a trading volume of more than $868 million in the last 24 hours. This volume is quite big considering that this is just a meme coin. It means there is still a significantly high demand for the coin.

3. Dogecoin’s nominal price is still low

Dogecoin’s buying price is still very low as compared to other big coins like bitcoin and Ethereum. This coin’s price is still below a dollar. That means that, unlike bitcoin that you have to buy a fraction due to its very high price, you can buy whole Dogecoins and buy in a sizeable volume.

If you buy about 1000 coins, at less than $1000, you could make a handsome profit if the coin hits about $10. Hitting this price is very possible considering the popularity this coin has garnered in cryptocurrency circles.

4. Dogecoin has a team of experienced developers

It is vital for any coin to have a team of good developers if it hopes to have a positive future. It is for this reason that bitcoin and Ethereum continue to dominate the market since there is a team that is constantly carrying out updates and ensuring the security of the projects. In the case of Dogecoin, developers Jackson Palmer and Billy Marker are still pretty much involved in the sustenance of the Dogecoin ecosystem.

5. Advanced features

It is also important to consider the features of a digital coin before investing in it. Most coins are just generics of mainstream cryptocurrencies that simply aim at raising funds and then going under. Dogecoin is different from most of these coins. Despite having copied most code from bitcoin and then tweaking it to make bitcoin, Dogecoin developers ensured that they actually made an improvement.

Dogecoin uses an advanced SCRYPT in its algorithm, which is structurally different from bitcoin’s SHA256. This script allows for faster block creation and confirmation, making transactions on Dogecoin much faster than bitcoin.

The Dogecoin platform also prevents double-spending, significantly enhancing peer-to-peer transactions. These changes show that Dogecoin, despite being perceived as a kind of a joke, has serious mechanisms that apply to digital coins as a whole. If the developers continue improving the code and the coin’s community keeps growing, it could become a serious coin to contend with within this market.

Want to learn how to safely invest in Dogecoin? Check out our comprehensive Dogecoin buying guide here, our Doge mining guide here, or purchase from our recommended platform below! UK readers can learn where to buy Dogecoin UK here.