How To Invest In Dogecoin Using Fidelity

Dogecoin is a cryptocurrency that was started as a joke based on a meme in 2013. It has gained popularity recently, with some people crediting Elon Musk for driving up its price through his tweets. Dogecoin is considered a risky investment due to its extreme volatility and lack of credibility when compared to other cryptocurrencies like Bitcoin. While it has the potential for short-term gains, it is not suitable for long-term investing because of its unpredictable nature. As of February 2021, Fidelity does not support Dogecoin, even though it deals with other types of cryptocurrencies.

Dogecoin's popularity and Elon Musk's influence

Dogecoin is a cryptocurrency that was initially created as a joke by software engineers Billy Markus and Jackson Palmer, who wanted to satirize the wild speculation in cryptocurrencies at the time. Despite its satirical nature, Dogecoin has gained popularity and is now considered a legitimate investment prospect by some.

Elon Musk, the CEO of Tesla and SpaceX, has been a major influence on Dogecoin's popularity. Musk frequently uses his social media platform to express his support for Dogecoin, and his endorsements have propelled the cryptocurrency to unprecedented heights. For example, in January 2021, Dogecoin went up over 800% in 24 hours, reaching $0.07, after receiving attention from Musk and other celebrities. Musk's tweets about Dogecoin have frequently been followed by price surges, leading some to claim that his actions amount to market manipulation. However, because cryptocurrencies are not regulated like stocks, these actions are not illegal.

Musk's influence on Dogecoin's value seems to be waning, with recent statements only slightly affecting its price. Despite this, Musk's support for Dogecoin remains notable, and he continues to express his belief in the cryptocurrency's potential.

Dogecoin has a large community of investors, ranging from experienced to very inexperienced, and it is used by small businesses, charities, and entrepreneurs worldwide as a means to buy and sell goods and services. Its popularity has led to petitions for it to be added to investment platforms such as Fidelity, which currently does not support Dogecoin but does support other cryptocurrencies.

Dogecoin's credibility and limitations

Dogecoin is a peer-to-peer, open-source cryptocurrency, created by software engineers Billy Markus and Jackson Palmer in 2013. It was initially conceived as a joke, satirising the hype surrounding cryptocurrencies. The logo is a Shiba Inu dog named Kabosu, which was taken from a popular meme at the time.

Dogecoin has several credible features. It is based on Litecoin and uses the same proof-of-work technology. It also has a loyal community of supporters who trade it and use it as a tipping currency for social media content. It has been used for payments and purchases, and it is accepted by many online retailers, including SpaceX and the Dallas Mavericks. It is also used for tipping and donations for charities and humanitarian initiatives.

However, there are some limitations to Dogecoin. It is not considered a good investment option due to its unlimited supply and the constant flow of new coins onto the market, which puts unending downward pressure on its value. It also has additional security risks compared to other major cryptocurrencies, as it hasn't had the same level of code-level scrutiny.

Overall, Dogecoin has a strong community and developer support, but it may not be the best option for long-term investment due to its unlimited supply and security concerns.

Where to buy Dogecoin

Dogecoin is a peer-to-peer cryptocurrency with a strong community of investors. It is used by small businesses, charities, and entrepreneurs worldwide to buy and sell goods and services.

Dogecoin can be purchased through several online platforms, including:

• Coinbase: A popular and secure crypto exchange that allows you to buy, sell, hold, send, and receive Dogecoin.
• Binance: A centralized exchange offering multiple payment options, including debit/credit cards, Google Pay, Apple Pay, and third-party payment channels.
• Kraken: A trusted global exchange with low fees and robust security features.
• Robinhood: A platform that allows direct purchase of Dogecoin without needing to convert other cryptocurrencies.
• Uphold: Another platform that supports Dogecoin but may have higher fees.

It is worth noting that some users have expressed their desire for Dogecoin to be available on Fidelity, and there is an ongoing petition for its inclusion. However, as of now, it seems that Fidelity does not support Dogecoin trading.

Dogecoin's future prospects

Dogecoin is a well-known "meme coin" and the first dog-themed token. It was created in 2013 as a "joke" and was named after the "Doge" meme based on a Shiba Inu dog. Although it was initially a fun spoof of Bitcoin, it quickly gained popularity due to viral social media campaigns and endorsements from celebrities and influencers like Elon Musk. Dogecoin has since expanded its use cases to include online purchases, tipping, and trading on various cryptocurrency exchanges.

Price Predictions for 2024-2025

According to price predictions, Dogecoin's value may fluctuate between $0.085 and $0.26 in 2024. Some analysts even predict that Dogecoin could reach $0.3751 by the end of 2024, with a potential surge to the $1 mark by 2025. However, it is important to note that these predictions are speculative and subject to change due to the volatile nature of the cryptocurrency market.

Influencers and Community

Dogecoin's price is heavily influenced by endorsements and tweets from celebrities and internet personalities like Elon Musk. The active and passionate Dogecoin community also plays a crucial role in driving price movements and organizing fundraising events. The community's enthusiasm and support for the coin could be a factor in its future success.

Utility and Adoption

Technical Challenges and Risks

One of the main challenges for Dogecoin is its unlimited supply, which could dampen long-term price appreciation compared to cryptocurrencies with capped supplies. Additionally, Dogecoin's price is highly speculative and volatile, making it a risky investment. The meme coin mania that drove its initial success may also be fading, and negative factors like regulatory crackdowns or broad crypto bear markets could impact its future performance.

In conclusion, Dogecoin's future prospects depend on various factors, including influencer endorsements, community support, utility, and adoption. While it has the potential to reach and surpass the $1 mark in the coming years, it also faces challenges and risks due to its unlimited supply and the volatile nature of the cryptocurrency market.

Dogecoin's volatility and risk

Dogecoin is a highly volatile cryptocurrency. Volatility refers to the rate at which the price of Dogecoin fluctuates. It is a statistical measure of the distribution of Dogecoin daily returns and is calculated using variance and standard deviation. Dogecoin's beta coefficient, in this case, 1.71, measures the volatility of Dogecoin compared to the systematic risk of the entire market.

Dogecoin's volatility can be beneficial to investors. Downward market volatility can be advantageous for long-term investors, allowing them to buy more Dogecoin at lower prices and improve their portfolio's performance. On the other hand, investors can sell their Dogecoin and invest in other coins when the crypto market is bullish.

Dogecoin's historical volatility measures its fluctuations based on previous trends and is used to predict its future behaviour. However, it cannot conclusively determine the future direction of the crypto coin. Dogecoin's implied volatility provides a positive outlook on future price fluctuations, implying that the crypto will return to its initially predicted market price.

Dogecoin's volatility is influenced by various factors, including media hype, supply and demand, investor sentiments, and government regulations. As a meme coin, Dogecoin is subject to high volatility, which can lead to triple-digit profits or losses for investors. Its value is heavily influenced by market sentiments, rumours, news, and even tweets.

The risks associated with investing in Dogecoin include market volatility, limited adoption and acceptance, and the lack of government regulations, which increase the chances of market manipulation and fraud. Dogecoin is an inflationary token with an unlimited supply, making it unsuitable for storing value. Its primary use case is as a payment option.

To mitigate the risks of investing in Dogecoin, investors can consider strategies such as Dollar-Cost Averaging (DCA), HODL, and leveraging short-term price movements. DCA involves dividing your initial capital into chunks and investing in Dogecoin over a set period to spread the risk. HODL is based on the assumption that Dogecoin's value will increase over time, allowing investors to remain unfazed by short-term market swings.

Frequently asked questions