Dogecoin made headlines in 2021 when it was riding a massive wave of hype and reached an all-time high at almost $0.74. While DOGE didn’t quite make it to the $1 mark, a lot of holders were still able to realize substantial profits.
If you’re still holding onto your DOGE, however, it’s likely that you’re asking yourself if you should sell your Dogecoin. The DOGE market has cooled off significantly, as the cryptocurrency is currently trading 90% below its all-time high. Investor sentiment in the cryptocurrency market is overwhelmingly negative after most major cryptocurrencies suffered substantial losses in 2022.
If you’re wondering whether DOGE is a good investment, there’s many different factors you need to consider. We’re going to sum up 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 might not be the best time to sell Dogecoin.
Dogecoin’s relative strength in the crypto market
Despite its 90% crash from the all-time high, Dogecoin has held up very well if we compare it to the rest of the cryptocurrency market. At the time of writing, the popular cryptocurrency meme is posting a -49% change in the last year. This is not a good look by itself, but Dogecoin looks a lot better if we consider that Bitcoin and Ethereum both dropped by about 58% in the same time period.
Among the top 100 crypto assets by market capitalization, Dogecoin was the 27th best performer in the last year. 11 of the crypto assets that have performed better than Dogecoin are stablecoins, so it’s fair to say that only 16 cryptocurrencies in the top 100 have fared better than DOGE in the last year.
Thanks to its market cap of $10.1 billion, Dogecoin is currently the 9th-largest crypto asset by market capitalization. It’s currently within striking distance of 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 capitalization of over $10 billion in 2023 is especially impressive since DOGE was launched all the way back in December of 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 crypto market for nearly a decade now.
Dogecoin has strengthened its position in the market over time and outperformed numerous “serious” cryptocurrency projects. Let’s take a look at the market capitalization Dogecoin managed to reach in its of its three major rallies:
- February 2014: $77 million
- June 2017: $412 million
- January 2018: $1.47 billion
- May 2021: $84.5 billion
It appears that the lighthearted approach of the Dogecoin project has actually been a point of strength for DOGE. To put it simply, crypto investors don’t expect any technical breakthroughs or major developments from Dogecoin, and the DOGE markets are driven primarily by hype and momentum.
This can be very beneficial in bull markets, when crypto investors are exuberant and don’t mind parking their money in purely speculative assets like DOGE. In the next bull market, Dogecoin could very well be one of the cryptocurrencies to explode in value. The interesting thing about Dogecoin is that even in the 2022 crypto bear market, it has 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 Dogecoin rally of 2021 was the support of billionaire entrepreneur Elon Musk, who frequently mentioned the meme cryptocurrency on social media. While Musk is a controversial figure to say the least, he still has a large number of devoted fans and is capable of moving markets with just a single tweet.
Despite Dogecoin’s crash 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 didn’t have any plans to sell it. In June 2022, Musk stated that he will keep supporting Dogecoin.
I will keep supporting Dogecoin
— Elon Musk (@elonmusk) June 19, 2022
Elon Musk’s support has been a major positive influence on Dogecoin. On the flipside, the DOGE market could be in for a seriously tough time if Musk ever changes his mind on Dogecoin.
Reasons why you should consider selling your Dogecoin
Even though Dogecoin has quite a lot going for it, we shouldn’t ignore the negatives. Let’s take a look at a few reasons why it might be a good idea to sell Dogecoin.
Dogecoin is not innovative
Dogecoin is a simple Proof-of-Work cryptocurrency that’s merge-mined alongside Litecoin. Its use is limited to simple peer-to-peer transactions, and it doesn’t offer any smart contracts functionality. Dogecoin is similar to Bitcoin in many ways, although its network of miners is much smaller. Therefore, Dogecoin is not nearly as bulletproof as Bitcoin in terms of security.
We should point out that Dogecoin developers are working to upgrades to the Dogecoin software, and have recently announced a fund that will distribute 5 million DOGE to core developers who contribute to Dogecoin releases.
Still, we shouldn’t expect any groundbreaking innovations to come out of the Dogecoin project, as it simply doesn’t have the necessary resources. However, developers are working on bug fixes and optimizations, and could integrate new technologies in the future.
Dogecoin is inflationary
Many investors are attracted to Bitcoin because it has a cap on its supply – there won’t ever be more than 21 million BTC. Dogecoin takes a different approach, as its supply inflates by approximately 5 billion DOGE every year and there is no upper limit on how many DOGE can exist. This supply inflation makes DOGE a less attractive option for some investors.
Over the long term, however, Dogecoin’s inflation could prove beneficial as it will continue providing a steady stream of rewards to miners. In the case of Bitcoin, miners will only be incentivized with transaction fees once all the BTC are mined, and it remains to be seen if this model is sustainable.
The crypto bear market is still in full swing
Another reason why holding DOGE might not be the best idea right now is that the cryptocurrency bear market which started in 2022 is still going strong. We’re seeing major industry players such as Coinbase, Kraken and Huobi laying off employees, and there’s plenty of unresolved controversies such as the dispute between the Gemini crypto exchange and Digital Currency Group.
The macroeconomic outlook is also negative, with the World Bank recently warning that we are “perilously close” to a global recession. In addition, rising interest rates in the United States and Europe have significantly impacted investments in risky asset classes such as tech stocks and crypto.
All this adds to the negative crypto market sentiment, which has already been battered by crashing crypto prices. 63 of the top 100 crypto assets by market cap have dropped by 50% or more in the last year. Among them 30 have crashed by 80% or more. As long as these conditions persist, it’s difficult to imagine that Dogecoin will perform well.
How to sell Dogecoin?
If you’ve decided to sell your Dogecoin, there’s plenty of options available. Due to DOGE’s popularity, the coin is listed on a large number of cryptocurrency exchanges. One of the best places to sell Dogecoin is Binance, which is the world’s most popular cryptocurrency exchange. Binance provides a large number of Dogecoin trading pairs, allowing users to trade Dogecoin against Bitcoin, BNB, stablecoins and a variety of fiat currencies.
Trade Dogecoin on Binance
Other solid options for selling Dogecoin include Coinbase, Kraken, Robinhood and OKX.
The bottom line – should you sell your Dogecoin?
As a long-term investment, Dogecoin has performed very well and even beat the majority of more serious crypto projects. So far, DOGE has been able to recover from its crashes and eventually reach new all-time highs. It still be possible for Dogecoin to reach $1 if there is another bull market for crypto currencies might.
However, the short-term prospects for Dogecoin don’t look good due to the negative sentiment in the crypto markets and the poor macroeconomic conditions, which are stifling the markets for speculative assets.
If you’re interested in other meme coins as well, we have prepared a list of meme coins that have the potential to see significant gains in the future.