Dogecoin made the headlines in the 2021 bull, hitting a high of almost $0.75. Although DOGE did not reach exactly $1, it has made many investors reach millionaire status. So, is now the time to sell Dogecoin? Let’s look at a few reasons why this might be an idea…
Is Dogecoin still an ideal investment?
While the current situation is far from ideal, there are signals that it is not the best time to sell Dogecoin. The leading meme coin is still in an ideal position compared to the rest of the market, even though it has dropped 90% from its ATH level. At the time of writing, the DOGE price is recording a -49% change from last year. That’s not a good look on its own, but Dogecoin looks much better considering Bitcoin and Ethereum are down about 58% in the same time frame.
Also, among the top 100 cryptos by market cap, Dogecoin was the 27th best performing last year. Of the cryptocurrencies outperforming Dogecoin, 11 are stablecoins, so it’s fair to say that only 16 of the top 100 cryptocurrencies outperformed DOGE last year.
With a market cap of $10.1 billion, Dogecoin is currently the 9th largest cryptocurrency by market cap. However, it is very close to Cardano, which is ranked 8th with a market capitalization of $10.6 billion. It should be noted that from time to time it even surpasses Cardano.
DOGE has stood the test of time
The fact that Dogecoin has a market cap of over $10 billion in 2023 is impressive, especially since DOGE was launched in December 2013. In a nutshell, DOGE has stood the test of time and has been a relevant part of the crypto market for nearly a decade. Also, it’s no secret that the biggest factor in the 2021 Dogecoin rally is the support of billionaire entrepreneur Elon Musk. While Musk is a controversial figure to say the least, he still has a large following and can move the markets with a single tweet.
Despite Dogecoin falling from its all-time high, Elon Musk still seems to be a DOGE fan. In March 2022, Musk said he still owns DOGE and has no plans to sell it. In June 2022, Musk announced that he would continue to support Dogecoin.
The support of Elon Musk has had a huge positive impact on Dogecoin. On the other hand, if Musk changes his mind about Dogecoin, the DOGE market could go through a seriously tough time.
Why you should sell Dogecoin
While Dogecoin has a lot to do, we should not ignore the downsides. Let’s take a look at a few reasons why selling Dogecoin might be a good idea.
Dogecoin is not innovative
Dogecoin is a simple PoW cryptocurrency mined alongside Litecoin. Its use is limited to simple peer-to-peer (P2P) transactions and does not offer any smart contract functionality. DOGE is similar to Bitcoin in many ways, although its miner network is much smaller. Therefore, Dogecoin is not nearly as bulletproof as Bitcoin in terms of security.
It should be noted that the Dogecoin developers are working on upgrading the Dogecoin software and have recently announced a fund that will distribute 5 million DOGE to core developers contributing to Dogecoin releases.
Still, we shouldn’t expect any groundbreaking innovations to emerge from the Doge project because it lacks the necessary resources. But developers are working on bug fixes and optimizations and may integrate new technologies in the future.
DOGE is inflationary
Many investors are attracted to Bitcoin because there is a limit to its supply. Dogecoin takes a different approach as its supply increases by around 5 billion DOGEs each year and there is no upper limit to how many DOGEs there can be. This supply inflation makes DOGE a less attractive option for some investors.
However, in the long run, Dogecoin’s inflation could prove beneficial as it will continue to provide miners with a steady stream of rewards. In the case of Bitcoin, miners will only be incentivized by transaction fees once all BTC has been mined, and it is not yet clear whether this model is sustainable.
The crypto bear market is still in full swing
Another reason why holding DOGE may not be the best idea right now is because the cryptocurrency bear market that started in 2022 is still going strong. We’re seeing major industry players like Coinbase, Kraken, and Huobi lay off their employees, and there are many unresolved controversies, such as the dispute between the Gemini crypto exchange and the Digital Currency Group. cryptocoin.com We have included DCG and the Genesis crisis in this article.
The macroeconomic outlook is also negative, with the World Bank recently warning that we are “dangerously close” to a global recession. Also, rising interest rates in the US and Europe significantly impacted investments in risky asset classes such as technology stocks and crypto.
All this adds to the negative crypto market sentiment, which has already been battered by the falling crypto prices. 63 of the top 100 cryptos by market cap fell 50% or more in the last year. Among them, 30 had accidents of 80% or more. As long as these conditions hold, it is hard to imagine that Dogecoin will perform well.
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