The value of Dogeco has skyrocketed in recent months, and you’ve probably seen one too many articles about it, or heard one too many anecdotes of people earning life-changing profits from the cryptocurrency, and you’re now ready to get in.
After all, it’s not like the currency was created as a joke or that you have trouble pronouncing it. It has risen to 60 cents from less than a penny only a month ago, and you don’t want to lose out on the opportunity to get in on it.
What exactly is Dogeco?
Dogeco was established by software programmers Billy Marcus and Jackson Palmer in late 2013 as a form of payment. With the help of a meme that was popular at the time, Palmer created the cryptocurrency’s logo to represent a Shiba Inu dog, which was purposefully misspelt to represent the cryptocurrency.
In the words of Pat White, CEO of Bitwave, “Doge was getting into making fun of Bitcoin.” Early on, a community of aficionados organized PR stunts to boost awareness of Dogeco, such as raising cash to send the Jamaican Bobsleigh squad to the 2014 Winter Olympics or sponsoring a NASCAR driver, among other things.
Dogeco coin achieved cult status on Reddit’s WallStreetBets message board in early 2021—the primary driver behind the GameStop incident in January—where devotees had vowed to boost its worth “to the moon” if the cryptocurrency’s value increased (that was before all discussion of crypto was banned on the subreddit).
Dogeco is no longer a joke, as seen by its meteoric rise in value, which will reach more than 5,000 per cent in 2021. Dogecoin has several supporters, including Tesla CEO Elon Musk, who has said that it is his favourite cryptocurrency. Musk also referred to Dogeco as “the people’s cryptocurrency” and said that a genuine Dogeco token will be planted on the moon.
Here are some things to think about before making a purchase, however:
Having a hunch that it’s a bubble won’t assist you
The majority of investors understand what a bubble is: it is what occurs when the price of an item significantly exceeds its true worth.
And those contemplating purchasing Dogeco are presumably aware that the digital token’s price, which has increased by more than 12,000 per cent over the year, isn’t supported by much more than the optimism that it will continue to rise in value.
That kind of speculation, of course, is what contributes to the formation of a bubble.
According to Bruce Mizrach, an economics professor at Rutgers School of Arts and Sciences, people purchase assets even when they know they are overpriced “because they anticipate prices to rise even more.”
Take note of this: That’s exactly how everyone else feels, too.
‘By the time most ordinary investors get into a growing investment, it’s usually too late,’ said Kent Baker, a finance professor at American University.
FOMO almost always backfires
Dogeco millionaires have their own stories to tell. People are purchasing homes as a result of the currency’s strength. Is it possible that you are not feeling fear of missing out?
“Herding” is a social bias that investors often fall victim to, according to Baker. In other words, they follow the herd because they believe that everyone else must be more knowledgeable than they are. As well as the fact that there is safety in numbers.
The majority of the time, such investors are mistaken on both counts, according to Baker.
In actuality, the other individuals who are “in the crowd” believe the same things that you do, with just as little evidence to support them.
You have no way of knowing what it is worth…or much else
Attempting to comprehend the intrinsic worth of a digital asset is “extremely difficult,” according to Mizrach.
You may at the very least obtain a price to earnings ratio for most companies, he said, which indicates how much investors are prepared to pay for a given dollar of profits generated by the firm in question. This statistic might assist you in determining if a firm is overvalued or undervalued.
When it comes to Dogeco, you’re in the dark.
In Mizrachi’s words, “the emergence of cryptocurrencies is reminiscent of the early phases of the internet boom when investors were attempting to assess firms without revenues.”
Because cryptocurrencies are so new, there is also a lot of uncertainty about how to purchase and sell them, how to keep the tokens safe from losses and hackers, and how the tax system works.
People should not put more money into Dogeco than they can afford to lose, according to experts, because of the uncertainties surrounding the cryptocurrency.
This is because, despite everything that has changed, certain things have remained constant.
“There is no such thing as a free lunch in investing — larger projected gains are always accompanied by higher expected risks,” Baker said. “The values of cryptocurrencies are very variable, which implies they are extremely dangerous investments.”