Dogecoin continues to make the national conversation when it comes to cryptocurrency. So what makes it so attractive to potential investors?
Why people invest in Dogecoin
Crypto expert Adam Morris, the co-founder of Crypto Head, which shares reviews, guides and news about cryptocurrency, recently explained why people invest in Dogecoin.
- “The reason people like investing in cryptocurrencies like Dogecoin is because they feel they can turn their investment into a much larger amount in a short period of time,” Morris said in an emailed statement to the Deseret News. “While it’s one of those investments that could go well short-term, this gambling mentality makes for poor long-term investment decisions.”
The downside of Dogecoin
Morris said the high spike in value seems attractive to investors. But the coins that see such a huge spike can come crashing down really fast.
- “It’s incredibly high risk because it has no real utility and has seen huge price increases off the back of celebrities and the gambling mentality of newer investors,” he said.
- “If you’re investing in coins like this, you need to be on the pulse and understand the level of risk you are taking on,” he added.
Antony Portno, founder of Traders of Crypto, a website dedicated to cryptocurrency information, told the Deseret News that investing in Dogecoin could “end in tears” if the cryptocurrency doesn’t pull the right way. The cryptocurrency can lose a lot of value if people stop talking about it.
What cryptocurrencies are worth investing in?
Morris said cryptocurrencies like Ethereum and Bitcoin — which are worth much more than Dogecoin — have a longer staying power, making them better long-term investments compared to the short-term Dogecoin.
Indeed, Yahoo! Finance reported that Dogecoin dropped in value this week because other forms of cryptocurrency — like Bitcoin and Ethereum — had a sharp rise.
- “Ethereum has been rallying in recent weeks as the EIB, the lending arm of the European Union, used its technology to issue €100m in two-year digital notes bonds,” according to Yahoo! Finance.