DeutschOn the international Dogecoin holiday, April 20, the meme coin was on everyone’s lips. The day before, Dogecoin (DOGE) reached its most recent all-time high after Elon Musk and other influencers diligently promoted it and caused a lot of buzz in the crypto market. As a result, Dogecoin was able to gain quite a bit with a market capitalization of around 50 billion US dollars.
The Joke Currency Records the Strongest Increase among all Cryptocurrencies
The fun currency Dogecoin was created in 2013 as a parody of Bitcoin and has since become one of the most popular cryptocurrencies. At that time, there was a separate blockchain for each new cryptocurrency and it was not yet possible to simply create new tokens with a few clicks on an existing blockchain, as is the case today with Ethereum, for example.
The hype surrounding Dogecoin naturally has a major impact on the price trend and has led to an increase since the beginning of the year – by an insane 7,900 percent! After this incredible success, DOGE itself was able to overtake some large and established altcoins and is now within the top ten of the largest cryptocurrencies. Many investors are wondering whether a strong correction is now imminent after such a rapid increase within a very short time and whether investing in Dogecoin is still worthwhile. The fact is that Dogecoin is by far the best performing cryptocurrency this year.
DOGE vs. Bitcoin and Litecoin
Dogecoin is basically structured similarly to Bitcoin. The only difference lies in the hashing algorithm, which was taken from Litecoin, but also in the block time and the maximum number of DOGE coins. This results in 5.256 billion Dogecoins being created annually, while the maximum number of all Dogecoins is not fixed.
The current block time is 1 minute per block, which contains a block reward of 10,000 DOGE. This results in around 14.4 million coins being created every day, the total value of which is currently around USD 763,000. Transactions on the Dogecoin network are processed ten times faster compared to Bitcoin and 2.5 times faster compared to Litecoin.
The DOGE network is neutral, censorship-resistant and decentralized – and thanks to these properties and the current hype, Dogecoin has made it into the top 5 cryptocurrencies.
The Problem: most of the Dogecoins are in a few Wallets
Only 11 previously unknown wallets are in possession of approx. 70% of all Dogecoins. This increases the risk that the Dogecoin price will be forced to its knees by the sell-off. It remains unclear which DOGE whales are behind the wallets. The fact that the cryptocurrency lives exclusively from hype and the desire for a quick profit does not inspire confidence either. Currently, Dogecoin is only used for speculation and has neither a concrete purpose nor a clear direction.
How Long Will the Hype Last?
The hype surrounding Dogecoin is not over yet – at least not as long as Tesla boss Elon Musk tweets about it and helps the fun currency to gain renewed attention. Thanks to the huge hype surrounding DOGE, copies of the cryptocurrency are now being created on Ethereum and the Binance Smart Chain (BSC). Many investors who are looking for a quick profit and have missed out on getting into DOGE are taking this opportunity to jump on one of the copies. This gambling is nothing new, but such hype is usually short-lived. In the past, it has often been shown that investors eventually drive the price down. It cannot be ruled out that this will also happen with Dogecoin.
Experts: DOGE is not a Long-Term Investment
Even if DOGE is a funny project, it has been around for many years and has a loyal community behind it. Nevertheless, it is still a shaky affair. The hype in social media is currently still great, but that is precisely what makes the course more fragile. In the long term, Dogecoin does not have high potential and lives exclusively from the influencers, who are usually the only ones who benefit from it.
Since there is no limit to the maximum amount of Dogecoin and the coin does not fulfill any real purpose, experts warn against investing in the cryptocurrency. DOGE is not a long-term investment, because after such a strong increase in such a short time, a strong correction is always more likely. The true substance of a project is only revealed in the bear market, which often follows a bull run – and this is hardly or not at all present with Dogecoin. At the latest then, investors in Dogecoin must expect heavy losses.
Instead, experts recommend that when entering the crypto market, you should first familiarize yourself with the leading cryptocurrency. Only after the functioning of Bitcoin is understood will the difference to other crypto assets become clear.
- Dogecoin
(DOGE) - Price $0.230
- Market Cap
$34.62 B
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