Last Updated on April 19, 2021 by Jason
Dogecoin is all the rage right now among investors. Why, might you ask? Well, there are a few major players in the arena right now, including Mark Cuban. Cuban owns the Dallas Mavericks, and he said that together with the team, they have so far completed 20K transactions. He now believes that Dogecoin is predicted to do really well in the future, but how do you know whether he is hyping it up, or it’s actually true?
If you are thinking about investing in Dogecoin, or DOGE, then you need to understand what the risks are. Let’s take a look at everything you need to know.
What is DOGE?
DOGE sells itself as the fun and friendly cryptocurrency in the market, and it is an open source, peer-to-peer currency that got its start back in 2013. Originally, the idea behind DOGE was to create a memorable crypto that helped users understand how blockchain works.
It is built on the same basic technology as the likes of Bitcoin; however, it has a few improvements on Bitcoin, and it lets users access more affordable, quicker trading. You can access an unlimited supply of DOGE and currency trades on a number of major platforms out there, like Binance.
DOGE was actually introduced as a joke back in 2013 to help raise awareness around what you could actually do with blockchain technology. DOGE was originally a joke, yes, but now it’s started to really gain some momentum thanks to the passionate online community that support it. It has had a lot of media time as of late, and right now it is the 13th most popular cryptocurrency, with a market cap of more than $5.9 billion.
Open Your Account
So, the first thing that you need to do to buy Dogecoin is open an account with a crypto broker that supports it, like Binance. There are other platforms out there to consider, and if you do, you need to look into these criteria:
- The commission schedule and broker’s fee
- Education tools and features that you can access
- The kind of tokens and coin that are available to sell and buy on the platform
- Accessibility to other markets
Fund Your Account, and Make a Purchase
After you have opened an account, you will purchase your dogecoin. First, open the trading platform and check out the current price for DOGE. While these prices are always fluctuating, you should be able to pay close to the market rate.
The best brokers out there like Binance will offer you a broad range of order types to choose from. If you haven’t got a lot of experience trading, then take a bit of time to get familiar with basic order types. Choose the order type you want and work out how much DOGE you are willing to purchase based on how much you’ve got in your trading budget.
Beyond this, your broker will fill your order, and when you see your DOGE wallet, this means that the transaction was successful. If you broker can’t fulfil the order for some reason, it will get canceled at the end of trading day.
Purchase a Wallet
A wallet for cryptocurrency gives you a set of keys that you can use to store your DOGE currency off a platform like Binance. This helps keep your investment safe, just in case the platform is targeted by hackers.
Binance and other platforms like Coinbase let you send and receive funds from your exchange wallet. For the best security possible, find a wallet that lets you manage your own private key, as opposed to doing this for you.
There are two main types of cryptocurrency wallets: cold and hot. Hot, software wallets are free to use, but you will need to be connected to the internet to use it and access your assets. A cold wallet is where you store your assets offline for high level security, and this could cost you up to $50. Make sure that you do enough in-depth research to decide which option is best for you. Personally, we think that the SecuX W20 is the most secure hardware wallet, while the Dogecoin wallet is the best software wallet.
Selling or Trading Your Cryptocurrency
Once you have DOGE in your wallet and have chosen software or hardware, you will now need to decide what kind of investment you want to go for. There are two main options:
- Long-term holding: this means that you believe that the price of Dogecoin is going to hold for months or years. If this is your approach, transfer your crypto to your wallet as soon as you can to keep it safe.
- Short-term scalping: this is short-term investing, and its capitalizing on small movements in the price of the crypto that you’re moving around. You will need to have regular access to your funds.
Current Prices of Crypto
The pricing and valuation of cryptocurrency changes by the minute. Let’s discuss some factors that determine this:
- Current supply: there is an unlimited supply of DOGE, but this doesn’t mean that every investor is willing to sell. The number of shares that are available on the exchange determine the current value.
- News: media coverage of cryptocurrency can shift the value of DOGE in a negative or positive direction.
- Current financial conditions: Investors tend to gravitate toward to alternative investments like crypto when the market is showing a downtrend. Poor economic conditions might increase the value of DOGE.
Keeping on top of how other cryptocurrencies are doing is a great way to decide whether to invest in a certain value or not.
Getting Started in Crypto
Whether you decide to invest in Dogecoin, Bitcoin, or another cryptocurrency altogether, just take note of the risks that are associated with it. The thing about the cryptocurrency market is that for the most part it is still unregulated, which means that crypto can go bust in value at any moment. This is why it’s important to not invest any money that you can’t afford to lose, and make sure that you include cryptocurrency as part of a diversified portfolio.