Dogecoin Stock Investment: A Beginner's Guide

Dogecoin is a decentralised cryptocurrency, created as a parody of Bitcoin. It was launched in 2013 by software engineers Billy Markus and Jackson Palmer. Dogecoin is a risky, volatile investment, and should only be purchased if you are in a strong financial position. It is prone to extreme fluctuations in value, due to its unlimited supply and its price being largely driven by social media movements and hype.

If you are considering investing in Dogecoin, you will need to open an account with a cryptocurrency exchange, such as Coinbase, Kraken, or Binance. Once your account is set up and verified, you can deposit funds and purchase Dogecoin. You can then decide how to store your Dogecoin, either by using an exchange or a digital wallet.

Where to buy Dogecoin

Dogecoin is one of the most popular cryptocurrencies to buy and is available on a variety of exchanges. Here are some of the best places to buy Dogecoin:

EToro:

EToro is an SEC-regulated platform that allows you to buy Dogecoin with low fees. It offers some of the lowest trading fees in the market and does not charge transaction fees on deposits made with debit or credit cards. eToro also has a low minimum investment requirement of only $10. The platform is user-friendly and suitable for beginners.

Crypto.com:

Crypto.com is a large exchange that allows you to buy Dogecoin with a debit or credit card in under 5 minutes. It offers a simple and fast account opening process with automated verification tools. However, debit and credit card deposits incur a 2.99% fee. Crypto.com also provides savings accounts and digital asset lending services.

Binance:

Binance is one of the largest cryptocurrency exchanges, offering a dedicated platform for US clients with over 60 digital currencies. It provides two options for buying Dogecoin with US dollars: through a domestic bank wire or ACH (no transaction fees), or with a debit or credit card (4.5% fee). Binance offers strong security controls, including two-factor authentication and IP address whitelisting.

Coinbase:

Coinbase is a trusted and regulated platform that is suitable for beginners. It offers a simple account creation process and supports various payment methods, including ACH, debit/credit cards, and PayPal. However, Coinbase charges higher fees, with a standard commission of 1.49% for ACH transfers and 3.99% for debit/credit cards and PayPal.

Kraken:

Kraken is a trusted and secure global exchange that offers low fees for buying Dogecoin. It provides advanced charting tools, 24-hour global client support, and margin trading features. Kraken emphasizes security and has tested technology and rigorous procedures to safeguard funds.

Gemini:

Gemini is a fully regulated exchange that helps legitimize cryptocurrencies worldwide. It offers discounts of up to 0% for volume traders and provides good security measures. Gemini trades in various cryptos, including Dogecoin, Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Paybis:

Paybis is a cryptography exchange that enables you to buy Dogecoin with a debit or credit card easily. It provides 24/7 live customer support and keeps your data secure using security standards. Paybis also offers a simple account verification process, allowing you to verify your account in just a few clicks.

Payment options

Once you have decided on a cryptocurrency exchange, you will need to deposit money into your exchange or brokerage account. Most exchanges will allow you to deposit money from a checking or savings account. Some will also accept wire transfers and PayPal transfers. If you deposit a large amount of money (usually more than $1,000), you may have to wait a few days for the transfer to clear before you can use the entire deposit.

A few exchanges allow you to use a credit card to buy Dogecoin, but this method is generally discouraged as your credit card company will consider the money to be a cash advance and charge added fees and a higher APR.

When you have money in your account, you can purchase Dogecoin. On the exchange's trading or purchase platform, search for Dogecoin or enter its ticker symbol, DOGE. Then, pick your trade type and input either the dollar amount you want to invest or specify how many Dogecoins you want to buy.

Dogecoin's volatility

Dogecoin is a highly volatile cryptocurrency. Its value is largely driven by social media movements and hype, with Tesla CEO Elon Musk being a key influencer.

Dogecoin's price history has been extremely volatile. After its launch in 2013, Dogecoin's price soared by 1,061% in 15 days from $0.0002 to $0.0023. However, it soon dropped and hit its lowest price on May 6, 2015, at $0.0000869. In March 2017, Dogecoin's price rose again by 1,494% to a peak of $0.004. This was followed by another drop, with prices falling below $0.001.

Dogecoin saw a revival in November 2017, with its price reaching $0.018 by January 2018. However, it took over three years for Dogecoin to reach that level again, as it experienced a prolonged period of low trading activity. In 2021, renewed interest from Elon Musk and other celebrity supporters sent Dogecoin's price surging to a new all-time high of $0.74, a 9,884% gain.

Given Dogecoin's volatility, it is considered a risky and speculative investment. It may be suitable for short-term traders willing to gamble, but it is not recommended for long-term investors.

Storage options

There are several storage options for Dogecoin, each with its own advantages and disadvantages. Here are some of the most popular ones:

• Hardware wallets: These are physical devices that store your private keys offline, offering an extra layer of security. Examples include the Ledger Nano S, Ledger Nano X, and Trezor Model T or One. Hardware wallets are considered the safest option but come with a cost, ranging from $50 to $150.
• Software wallets: These are digital applications installed on your computer or smartphone. They are often free but are more susceptible to hacks since they are connected to the internet. Examples include the Exodus wallet and the Atomic Wallet.
• Web wallets: These are accessible through a web browser and are often provided by cryptocurrency exchanges. They offer convenience and accessibility but are more vulnerable to hacking and cyber-attacks.
• Paper wallets: This method involves printing your private keys on a piece of paper, providing an offline and tangible approach to storing your Dogecoins. While paper wallets are secure, they may be inconvenient and vulnerable to physical theft or destruction.
• Multi-signature wallets: These wallets require multiple signatures to authorize a transaction, adding an extra security layer.
• Official Dogecoin Wallet: The official Dogecoin wallet offers a core wallet that downloads the entire blockchain and helps secure the network. There is also a lite version called MultiDoge for storing and transferring Dogecoin, and a mobile version for Android devices.

It is important to consider your needs and priorities when choosing a storage option. For example, if you prioritise security, a hardware wallet or paper wallet might be the best choice. On the other hand, if you value convenience and accessibility, a hot wallet like an online or mobile wallet could be more suitable. Additionally, it is recommended to use a combination of online and offline wallets to diversify your storage and manage your Dogecoin effectively.

Dogecoin's pros and cons

Dogecoin Pros and Cons

Dogecoin is a cryptocurrency that was created to make digital currency more fun, friendly, and approachable. It is a decentralised peer-to-peer cryptocurrency that enables users to send and receive money online without any centralised authority. Dogecoin is often referred to as a 'meme' crypto due to its playful nature and association with the Doge meme.

Pros of Investing in Dogecoin:

• Day trading Dogecoin can be profitable. Due to its volatility, small price changes can return huge gains for investors.
• Dogecoin has a large and active community of supporters on social media, which can help promote the currency and drive up its value.
• The number of Dogecoins available is unlimited, meaning anyone can purchase Dogecoin either as a fun investment or a serious one.
• Dogecoin has a relatively easy mining process compared to other cryptocurrencies.
• Dogecoin has been listed on major trading platforms such as eToro and Coinbase, boosting its price and accessibility.
• Dogecoin has a humanitarian and friendly feel to it, having been used to raise funds for charitable projects and athletes.
• Dogecoin has a faster transaction speed than Bitcoin, which could help its adoption as a transactional currency.
• Dogecoin has gained support from celebrities such as Elon Musk, who have helped to increase its profile and value.

Cons of Investing in Dogecoin:

• Dogecoin is a risky and volatile investment, and its value is prone to extreme fluctuations.
• Dogecoin is not a long-term investment asset like Bitcoin, and its value is largely driven by social media hype.
• Dogecoin has poor technical support compared to other cryptocurrencies, and there have been no technological updates since 2015.
• Dogecoin is associated with pump and dump schemes, where a group of people manipulate the price of the currency by buying a large number of coins and then selling them at a higher price.
• Dogecoin is not the number one transactional currency, and it is not as widely integrated into merchant platforms as other cryptocurrencies.
• Dogecoin relies too much on its fun nature rather than any real innovation, which could hinder its adoption and integration.
• Dogecoin relies too heavily on Elon Musk to drive its price, which could be problematic if his support wavers.
• Dogecoin has no supply cap, which is a disadvantage as cryptocurrencies with no supply cap are not ideal assets to hedge against inflation.

Frequently asked questions