Should I sell my dogecoins? Here’s what you need to know

If you’re still holding on to your DOGE, chances are you’re wondering if you should sell your Dogecoin. The DOGE market has cooled significantly, with the cryptocurrency currently trading 90% below its all-time high. Investor sentiment in the cryptocurrency market is overwhelmingly negative after most major cryptocurrencies suffered significant losses in 2022.

If you are wondering if DOGE is a good investment, there are a lot of different factors to consider. We will summarize the main arguments for and against investing in Dogecoin.

Reasons why you should consider not selling your dogecoin

While the current situation is far from ideal, there are compelling reasons why now may not be the best time to sell Dogecoins.

Dogecoin’s relative strength in the crypto market

Despite collapsing 90% from the all-time high, Dogecoin has held up very well compared to the rest of the cryptocurrency market. As of this writing, the popular meme cryptocurrency is showing a change of -49% over the past year. This is not a good result in itself, but Dogecoin looks much better considering that Bitcoin and Ethereum both fell about 58% during the same period.

Among the top 100 crypto assets by market capitalization, Dogecoin was the 27th best performer last year. 11 of the cryptoassets that outperformed Dogecoin are stablecoins, so it’s fair to say that only 16 cryptocurrencies in the top 100 outperformed Dogecoin last year.

Thanks to its $10.1 billion market cap, Dogecoin is currently the 9th largest crypto asset by market capitalization. It is not far from Cardano, which is in 8th place with a market capitalization of $10.6 billion.

Dogecoin has stood the test of time.

The fact that Dogecoin has a market cap of over $10 billion by 2023 is particularly impressive since DOGE was launched in December 2013. At the time, it would have been easy to dismiss Dogecoin as a temporary fad, but DOGE has stood the test of time and has been a relevant part of the cryptocurrency market for almost a decade now.

Dogecoin has strengthened its position in the market over time and has surpassed many “serious” cryptocurrency projects. Let’s take a look at the market cap that Dogecoin has managed to achieve in its three major rallies:

  • February 2014: $77 million
  • June 2017: $412 million
  • January 2018: $1.47 billion
  • May 2021: $84.5 billion

It seems that the easy approach to the Dogecoin project has actually been a strong point for DOGE. In short, cryptocurrency investors do not expect any technical breakthroughs or major developments from Dogecoin, and the DOGE markets are mostly driven by hype and momentum.

This can be very beneficial in bull markets where crypto investors are exuberant and are not shy about parking their money in purely speculative assets like DOGE. In the next bull market, Dogecoin may well be one of the cryptocurrencies that explodes in value. The interesting thing about Dogecoin is that even in the cryptocurrency bear market of 2022, it held up better than the majority of other cryptocurrencies.

Elon Musk still seems to be a fan of Dogecoin.

It’s no secret that the biggest factor in the 2021 Dogecoin rally was the support of billionaire entrepreneur Elon Musk, who frequently mentioned the cryptocurrency meme on social media. Although Musk is a controversial figure to say the least, he still has a large following and is capable of moving the markets with a single tweet.

Despite Dogecoin collapsing from its all-time high, Elon Musk still seems to be a fan of DOGE. In March 2022, Musk said he still owned DOGE and had no plans to sell it. In June 2022, Musk said he would continue to support Dogecoin.

Elon Musk’s support has had a big positive impact on Dogecoin. On the other hand, the DOGE market could face very difficult times if Musk changes his mind about Dogecoin.

Reasons why you should consider selling your dogecoin

Although Dogecoin has a lot of advantages, we should not ignore the negative aspects. Let’s look at a few reasons why it would be a good idea to sell Dogecoin.

Dogecoin is not innovative

Dogecoin is a simple Proof-of-Work cryptocurrency that is mined by merging with Litecoin. Its use is limited to simple peer-to-peer transactions and it does not offer any smart contract functionality. Dogecoin is similar to Bitcoin in many ways, although its network of miners is much smaller. Dogecoin is therefore not nearly as robust as Bitcoin in terms of security.

We should point out that the developers of Dogecoin are working on upgrading the Dogecoin software and recently announced a fund that will distribute 5 million DOGE to core developers who contribute to Dogecoin builds.

Still, don’t expect groundbreaking innovations to come out of the Dogecoin project, as it simply doesn’t have the necessary resources. However, the developers are working on bug fixes and optimizations and may incorporate new technologies in the future.

Dogecoin is inflationary

Many investors are attracted to bitcoin because its supply is limited: there will never be more than 21 million BTC. Dogecoin takes a different approach as its supply grows by around 5 billion DOGE every year and there is no upper limit to how many DOGE can exist. This supply inflation makes DOGE a less attractive option for some investors.

In the long run, however, the inflation of Dogecoin may prove beneficial as it will continue to provide a steady stream of rewards to miners. In the case of bitcoin, miners will only be rewarded with transaction fees once all BTC have been mined, and whether this pattern is sustainable remains to be seen.

The cryptocurrency bear market is still in full swing.

Another reason why it might not be the best idea to hold DOGE right now is that the cryptocurrency bear market that started in 2022 is still in full swing. We’re seeing major industry players like Coinbase, Kraken, and Huobi lay off employees, and there are many unresolved controversies, such as the dispute between cryptocurrency exchange Gemini and Digital Currency Group.

The macroeconomic outlook is also negative, with the World Bank recently publishing a report on the economic and social situation in the world warning that we are ” dangerously close ” of a global recession. In addition, rising interest rates in the US and Europe have had a significant impact on investments in risky asset classes such as tech stocks and crypto.

All of this adds to the negative sentiment in the crypto market, which has already been hit by the cryptocurrency crash. 63 of the top 100 crypto assets by market capitalization have fallen 50% or more in the past year. Among them, 30 collapsed by 80% or more. As long as these conditions persist, it is hard to imagine Dogecoin doing well.

In short, should you sell your Dogecoins?

As a long-term investment, Dogecoin performed very well, even beating the majority of more serious crypto projects. So far, Dogecoin has been able to recover from its downfalls and reach new highs. It may still be possible for Dogecoin to reach $1 if there is another cryptocurrency bull market.

Dogecoin’s short-term outlook does not look good due to negative sentiment in the crypto markets and poor macro conditions stifling speculative asset markets.

If you are also interested in other meme currencies, we have compiled a list of meme currencies that have the potential to see big gains in the future.

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