What is up with Dogecoin?

Let’s talk about Dogecoin. We’ve had a lot of requests to discuss it since it has been in the news a lot, stirring up the online world with a sudden spike in price and a subsequent roller coaster of ups and downs. It’s known as the plucky little crypto that could, the gateway for the regular person to get into cryptocurrency without having to mortgage the house to get one or two Bitcoins. Or is it? Let’s dive into the doge pound. 

Started back in 2013, the meme currency chiefly differentiated itself from Bitcoin right off the bat by using a different, less resource intensive encryption method, which meant that it became much faster and cheaper to mine it as well as transfer it. That also resulted in a lot more of them becoming available in a short period of time. Which in turn made it easier to manipulate. Elon Musk provided the perfect example when he tweeted out his support of Dogecoin, causing that massive spike in its perceived value we mentioned earlier. It went from a fraction of a cent to $0.46 practically overnight. If someone had put down a mere hundred dollars a month before, they suddenly found themselves with a lot of money available to them. 

Yet, is it a currency? If you recall from our discussion on Bitcoin and whether it is a currency, one of the things that makes it so is whether or not it has fees associated with transferring it. Bitcoin has massive fees to do anything with it and while Doge has few fees, they still exist. It also is a centralized coin that has no real cap. It started with one but it was reached so quickly that they just pumped out five times that cap without thinking twice. 

It also has had its trade restricted by well-known trading apps like Robinhood. The story is that Doge was trading at such a high volume, it caused a system failure. Taking that explanation at face value it still sucks. It means that Robinhood’s code can’t handle a popularly traded stock or coin. It’s an indictment of the way they run their business. It’s as though they never thought to stress test their system. Normally that wouldn’t be such a big deal but it’s one of the most popular ways to buy and sell crypto of all kinds, including Dogecoin. 

How do you navigate all of this? All too often, people are constantly reacting. Whether it’s a tweet from Musk or Tom Brady adding laser eyes to his profile pic (this happened and the price of Bitcoin spiked. No joke). This reactive behavior is what is causing the price of Doge, Bitcoin and others to fluctuate so much. No one is really looking for and getting solid data about what is happening right now. Actually happening, not what a random tweet asserts is happening. It isn’t hard to imagine how regular people are getting hurt here as they sell when they should hold and buy when they should wait. Not just regular people either, but funds and even professional investors can get sucked in when they are too greedy. 

That’s why TARTLE is such an advocate for getting hard, first person data to make decisions with. Instead of reacting, it’s possible to get a read on what is going on by actually talking directly to people. When a fund does that, they are making decisions not based on the latest tweet but on what real people are planning and perceiving. That is a much better approach than just following whatever pied piper comes along. If enough people can grasp this concept, perhaps the general behavior will change and people will look to fundamentals again instead of just memes and bring some stability back to the market.

What’s your crypto worth? Sign up for the TARTLE Marketplace through this link here.