4 questions to answer before buying Dogecoin
If you are thinking of putting your money into Dogecoin, there are a few things you should ask yourself first.
Few cryptocurrencies have had a bigger or wilder 2021 than Dogecoin. From the start of the year to the beginning of May, the price of Dogecoin increased by 12,000%. It has since fallen by more than 50%. It is also one of the few cryptocurrencies to become a household name. Even my grandmother has heard of it.
Dogecoin’s price fluctuations and popularity might make you want to get in on the action. But this coin is far from a slam dunk investment, so be sure to answer a few important questions before you buy.
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1. Why do you think Dogecoin is worth buying?
Dogecoin’s success has attracted a lot of new buyers. Many are interested because they don’t want to miss out if the price continues to rise, or because they have heard about this new money-making opportunity through word of mouth.
When deciding whether you should buy Dogecoin, none of the above reasons is enough to say yes. Past results are no guarantee of future results. The price has exploded before, but that doesn’t mean it will happen again.
There is a popular acronym in the crypto community – DYOR, which stands for “do your own research”. If you want to buy Dogecoin, think long and hard about why it is worth buying it. It was, after all, created as a joke, and nothing sets it apart from the thousands of other pieces. Its popularity has driven up the price, but popularity alone is not a good long-term investment.
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2. Have you considered other cryptocurrencies?
Cryptocurrency is full of exciting coins and projects. If Dogecoin has interested you in crypto, take the time to see what else there is.
Bitcoin is the world’s largest cryptocurrency, and with its limited supply, some believe it could succeed as a digital store of value. Along with the Ethereum blockchain and the smart contracts it offers, Ether is also very popular, and there are several reasons to buy Ether on Dogecoin. Those who appreciate cryptocurrencies with less environmental impact may like Cardano, which focuses on both sustainability and affordability.
These cryptocurrencies, and many more, have their own unique advantages that make them special. Dogecoin does not, which will likely limit its growth potential.
3. What are your plans with your investment?
Cryptocurrency prices can change quickly and Dogecoin is one of the most volatile. This is why it is important to have a plan. Otherwise, you might be wondering whether to sell after every price move.
Your investment plan is the terms under which you will sell all or part of your Dogecoin. Let’s say you buy Dogecoin for $ 0.34. You can decide to sell if the price drops to $ 0.20 or less, or if it goes up to $ 0.55 or more. Another popular option is if the price doubles, you take out your initial investment and leave the rest.
You can also use a calendar for your plan instead of the prices. Some buyers agree to hold Dogecoin for three months, a year, or more. This can be a good way to avoid worrying too much about short-term price fluctuations.
4. How will you buy Dogecoin?
If you are sure that you are buying Dogecoin, you should know how to buy it. Since Dogecoin was much smaller and so controversial, some of the major cryptocurrency exchanges do not offer it.
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A good place to get Dogecoin is the Gemini exchange. It’s one of the largest exchanges in the US, it’s secure, and it’s beginner-friendly. If you are new to crypto and don’t have an account with an exchange yet, then Gemini is probably the easiest option.
Buying Dogecoin is not a decision to be taken lightly. The hype train may be over, and if you’re expecting some big wins, it’s best to temper those expectations. Spend some time on the above questions to decide if you are going to buy Dogecoin, what your plans will be and how you are going to make the purchase. And if you do decide to buy, only put in what you can afford to lose.