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What to consider before you invest in Dogecoin

A financial expert suggests cryptocurrency investors may want to hold off on investing quickly

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The Shiba Inu dog, the meme for the Shiba Inu token, a former of Shib cryptocurrency.

An illustration of a Shib Inu dog.

Alex Cochan, Deseret News

Cryptocurrency investors who are investing in Dogecoin because it’s the hot new trend may want to hold off, according to Jordan Awoye, managing partner at Awoye Capital, a financial service company.

Awoye gave his advice in a new opinion piece for CNBC, saying his clients ask him whether they should invest in Dogecoin. And he has a simple response for them.

  • “I explain to clients that they need to determine how much risk they can handle, especially when it comes to cryptocurrency. And since every individual is different, the conversation will be focused on that person’s goals before deciding how much risk to take.
  • “If a client is risk averse, crypto isn’t the investment for them,” he said.

Awoye wrote for CNBC that he tells clients to do proper research before they invest in any cryptocurrencies. He admits there are some benefits to Dogecoin — it’s low cost, it can be a future investment and it’s trending upward.

But, he wrote, Dogecoin is still a high risk investment without any regulation. And there’s not a lot of research available. So he still advises people to proceed with caution.

Dogecoin and caution

Yes, Dogecoin may seem like the hot new thing right now. But there’s still so much risk and volatility to the market, experts say. In fact, even the official Dogecoin Twitter account urged caution among investors, especially since there are some scams going around about the cryptocurrency.

  • “A word of warning: Do not send coins to people claiming they will double, triple or otherwise multiply your coins. Those are scams. We cannot return your money to you either. Please watch out and remember if something sounds to good to be true, it likely is,” according to Dogecoin.

Tesla CEO Elon Musk has urged Dogecoin investors to be cautious, too, in a video he posted on social media, as I explained for the Deseret News.

  • “People should not invest their life savings in cryptocurrency,” said Musk. “It should be considered a speculation at this point and so don’t go too far on the crypto speculation part.”