ALTHOUGH a similar cryptocurrency Shiba Inu has been on quite the run lately – the year Dogecoin has had can’t be overlooked.
In the past 24 hours, the price of Dogecoin has dropped 6% but has gained 2% in the last seven days, according to Coinbase.
Although there’s been recent volatility, Dogecoin has been one of the most popular cryptocurrencies in 2021.
In the past year, Dogecoin has skyrocketed more than 8,000%, according to Coinbase.
If you were considering buying, we explain a few things you need to know.
As always, just be aware that making money through investing is never guaranteed and you could lose all the cash you put in.
1. What is Dogecoin?
Dogecoin was launched in 2013 by software engineers Billy Markus and Jackson Palmer.
Originally, the cryptocurrency started as a joke, having the Shiba Inu dog as its logo.
The image became a popular internet meme called doge, and it features the dog surrounded by text in the comic sans font with words like “much wow.”
Aside from the internet traction, Dogecoin has some notable features including its cheap price, unlimited supply, and script algorithm.
2. The meme and Elon Musk effect
Because it has mainly been a joke, the rapid price increase in 2021 can be attributed to retail investors and billionaire Elon Musk.
Dogecoin can be thought of as a meme coin – because it isn’t really gaining on its fundamentals.
It is similar to the epic gains that GameStop and AMC have experienced this year, which was initiated by a Reddit mob driving up the price in an effort to punish hedge funds engaging in short-selling.
When it comes to Dogecoin, some Reddit users have written messages, and have posted memes in threads that include “dogecoin to the moon” in efforts to drive the price up.
In May, Mr Musk’s rocket company SpaceX also said it would launch a so-called “DOGE-1 Mission to the Moon” during the first quarter 2021.
Musk alone also has plenty of influence on Dogecoin. All it takes is a simple tweet to either tank or drive up the price.
3. Dogecoin is an even riskier cryptocurrency
But of course, all cryptocurrencies come with risks including Dogecoin.
This is because of the complexity and heavy volatility in the industry.
The heavy volatility is especially true to Dogecoin. For instance, Dogecoin hit an all-time high of $0.737567 in May.
Some were hoping that the price would reach as high as $1 after he made his highly anticipated Saturday Night Live appearance.
But instead, the opposite happened and Dogecoin tumbled.
Since Musk’s SNL appearance, Dogecoin has not come close to its all-time high and hasn’t traded above 30 cents since early September.
Plus, China’s ban on cryptocurrencies has caused some concern.
4. Where will the price wind up in 2022?
The trends haven’t been favorable lately – but keep in mind that at any time Dogecoin can explode or even crash again, as we’ve seen on various occasions this year.
Some are wondering where the price will wind up a year from now.
According to Wallet Investor, the price of Dogecoin is expected to reach $0.476 at this time in 2022.
Meanwhile, Coin Price Forecast sees the price of Dogecoin rising to just $0.29 at the end of 2022.
We’ve revealed a price prediction for Dogecoin.
We’ve also done other price predictions for cryptocurrencies including Bitcoin, Ethereum, Shiba Inu, dYdX, and EOS.