Should You Buy Dogecoin While It’s Still Below $0.20?

This meme token is trading at a deep discount from its all-time high.

About 3 years ago dogecoin (Doge -3.37%) He was on an amazing journey to the moon. The dog-inspired token captured the imagination of speculators during the meme stock mania, hitting an all-time high of less than $0.74 in May 2021.

Since then, Dogecoin has been trending downward, even as the overall cryptocurrency market has been on the road to recovery. As of this writing, the token is 78% below its all-time high.

Perhaps the bulls are hoping for better days to come. Should you buy now when Dogecoin is below $0.20?

new interest

The cryptocurrency market is once again attracting investors.industry’s Market capitalization It has reached $2.4 trillion (as of April 23), up from about $800 billion at the beginning of 2023. Bitcoinand Ethereum To a lesser extent, it drives profits.

Dogecoin significantly underperformed these top two cryptocurrencies last year. But it’s up 79% so far this year, putting it ahead of the competition for 2024.

It is very difficult to determine the cause of such large price fluctuations associated with digital assets. One such catalyst is Spot Bitcoin ETF, more approvals may be forthcoming. Another impetus could be that X, formerly known as Twitter, may integrate Dogecoin as a payment mechanism for its social news app. Theoretically, this will increase the demand for the DOGE token and increase its price.

But the excitement over this perhaps game-changing result appears to be waning. Dogecoin plummeted 27% in April. Extreme volatility is the name of the game, as various hype cycles can come and go quickly.

Questions about the usefulness of Dogecoin

Dogecoin was created in 2013 as a fun alternative to Bitcoin. That was exactly the purpose. Therefore, it is absolutely incredible that it has now grown to become the 8th most valuable blockchain network with a market capitalization of $23 billion.

It did so with little practicality in the real world. Let me be clear: the fact that we have a strong community of supporters is valuable in itself. However, as time passes, I think that feeling will fade someday. If Dogecoin can be used to send money to X, it will be a step in the right direction.

However, I think this points to the fact that Dogecoin in its current state has little chance of surviving long-term. In other words, I think the probability that the price of this token will eventually reach zero is quite non-zero.

Until now, the crypto space has been primarily seen as a playground for speculation. And why not? With prices skyrocketing in a short period of time, people want to take action to get rich.

But if we look 10 or 20 years from now, the cryptocurrencies that survive and thrive will have succeeded by introducing real-world practicalities. Ethereum seeks to eliminate the need for intermediaries in various industries and has a deep ecosystem of decentralized applications. Bitcoin has attractive characteristics that make it an excellent store of value asset and is poised to become a significant competitor to the current monetary system.

When pitted against these two industry heavyweights, Dogecoin looks like a worthless project. Although its price is far from the record set three years ago, I think investors should stay as far away from Dogecoin as possible. Consider owning Bitcoin, Ethereum, or one of the many other currencies. growth tech stocks If your tolerance for risk is high for now, give it a try.

Neil Patel and his clients have no positions in any stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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