Bitcoin
1 Top Cryptocurrency to Buy Before It Surges 150%, According to a Popular Analyst
A closely watched crypto analyst believes Dogecoin has a bright future.
Dogecoin (DOGE -3.98%) has gone through some wild swings in the last three years. The cryptocurrency was launched in 2013 as a parody of Bitcoin (Bitcoin -3.26%) in honor of the Shiba Inu dog meme. It was worth just $0.01 at the start of 2021, but on May 8 of that year, it hit a record $0.73.
This recovery was driven by two main tailwinds. First, a mix of social media buzz, low interest rates, and stimulus checks generated a buying frenzy in cryptocurrencies, meme stocks, and other speculative investments in 2021. Second, celebrities like Elon Musk, Mark Cuban, and Snoop Dogg joined the movement and promoted Dogecoin to their followers on social media.
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But today, Dogecoin is only worth about $0.16. Rising interest rates drove investors away from speculative investments like cryptocurrencies, and many of the market’s smaller altcoins collapsed as a new crypto winter began.
Faced with these challenges, many investors may think it is smarter to stick with “blue chip” cryptocurrencies like Bitcoin and Ether. However, some investors believe that Dogecoin could still recover in the near future.
Altcoin Sherpa, a pseudonym for a closely followed crypto analyst with nearly 217,000 followers on investors could do at the moment. Let’s see if this outlook makes any sense – and whether investors should be more optimistic about this volatile situation. meme coin.
What is the bullish case for Dogecoin?
Altcoin Sherpa’s bullish case for Dogecoin is based on the belief that retail investors will buy it again, that it has high liquidity and low downside relative to other meme coins, and that it is more attractive than many of the altcoins minors.
He also believes that one tweet from Elon Musk will be enough to “explode everything”. In the past, several of Musk’s tweets about Dogecoin – along with TeslaGoogle’s acceptance of Dogecoin payments and a temporary change of Twitter’s logo to Shiba Inu last year (prior to its renaming as X) – all of these have increased the price of the meme coin.
But Dogecoin still has fewer catalysts than other cryptocurrencies
Dogecoin may be more stable than other smaller altcoins, but it also has fewer long-term catalysts than Bitcoin and Ether. It is now accepted as a payment method at some businesses, but its volatile pricing still makes it more of a publicity stunt than a realistic payment option for most customers.
Regulators also don’t seem too impressed with Dogecoin. Last September, the New York State Department of Financial Services excluded Dogecoin from its “green list” of eight regulated cryptocurrencies – which include Bitcoin, Ether and six stablecoins from PayPal It is Twins. This exclusion suggests that it is still a highly speculative investment.
Dogecoin’s blockchain platform also cannot be used natively to develop decentralized applications. This is because it was originally forked from the Bitcoin blockchain, which does not support application development and uses the same energy-intensive proof of work (blow) method to extract your tokens.
In comparison, Ethereum, SolanaIt is Cardano all use the most energy-efficient proof-of-stake (PoS), which has been widely adopted for the development of decentralized applications and smaller tokens. Dogecoin supporters later launched Dogechain, a separate blockchain network to support Dogecoin-based applications, but it is not as widely used as other decentralized platforms.
There is also evidence that investors are simply losing interest in Musk’s views on Dogecoin. In April this year, he randomly tweeted about his growing popularity, but his price barely changed. This waning interest runs counter to Altcoin Sherpa’s view that “all it takes” to lift Dogecoin would be another bullish tweet from Musk.
Investors should be skeptical about the future of Dogecoin
Dogecoin may have a better future than many of the smaller altcoins on the market, but I cannot confidently say that it will rise by 150% in the near future. Interest rates are still high, and the new Bitcoin ETFs and upcoming Ether ETFs could drive many investors away from smaller altcoins and meme coins even as crypto winter ends.
Therefore, instead of following pseudonymous crypto analysts with a large social media audience, investors should perform their own due diligence and understand that Dogecoin could easily experience a 50% decline in value before doubling or tripling in this challenging market.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin, Cardano, Ethereum, PayPal, Solana and Tesla. The Motley Fool recommends the following options: June 2024 short calls for $67.50 on PayPal The motley fool has a disclosure policy.