With over 10,000 coins in the cryptocurrency market, you might need help picking one best suited to your needs. Besides Bitcoin and Ethereum, only a few people know about other coins, such as Dogecoin (DOGE), that you might use to diversify your investment portfolio.
Dogecoin is one of the biggest and well-liked cryptocurrencies in the market. The CEO of Tesla and SpaceX, Elon Musk has even acknowledged it. Its history, adoption, and community are fascinating, which explains why it has, for the longest time, held its position among the top ten largest cryptocurrencies.
This article will untangle everything there is to Dogecoin. If you are just starting on cryptocurrency investments, this article will also explore how to buy Dogecoin like a pro.
Before we start, it is momentous to note that Dogecoin is a volatile asset. Its price can change drastically within a short time. This article will look into several instances of DOGE’s volatility.
Understanding Dogecoin
Before we look at how to buy Dogecoin, let us explore what this token is and its relevance in the booming cryptocurrency industry.
Dogecoin taps blockchain technology to run an open-source, peer-to-peer network. Dogecoin is also the pioneer of meme coins. Meme coins are popular cryptocurrencies associated with internet memes and vibrant internet communities.
DOGE comes with a Shiba Inu logo. This famed dog has been at the center of dog-themed cryptocurrencies, known for volatile price movements.
The history of Dogecoin dates back to 2013. At the time, Jackson Palmer and Billy Markus came together to create the coin, which had already gained a large community because of funny internet memes.
Dogecoin, like Bitcoin, runs under a proof-of-work consensus. Miners on the blockchain receive rewards in the form of DOGE for solving blocks. However, unlike Bitcoin, DOGE is inflationary, meaning the developers did not impose a supply cap.
The Dogecoin Community
Given that Dogecoin is vital to the internet culture, the meme coin is focused on community. The price of this cryptocurrency changes depending on the community’s sentiments towards the token.
Elon Musk is a vocal advocate of Dogecoin. In the past, Musk has caused Dogecoin’s rally to record highs by simply tweeting. Furthermore, the billionaire recently endorsed the use of DOGE as a method of payment on select Tesla products.
The Dogecoin community also contributes to boosting the project’s popularity. For instance, one of the biggest Dogecoin supporters, Glauber Contessoto, has refused to sell his stash over the years despite the price of the token fluctuating periodically.
You should note that Jackson Palmer and Billy Markus are no longer involved in the project. Palmer has been especially vocal in his criticism of the cryptocurrency industry, denouncing investments in the industry.
Dogecoin and other meme coins continue to receive denunciation for their lack of utility and high price volatility. Nevertheless, the coin continues to grow. The chart below shows the total number of addresses holding Dogecoin.
Dogecoin Price
Dogecoin is an inflationary token. This means there is no maximum supply on the number of DOGE tokens that can be mined. This model affects the long-term price performance of the token.
As aforementioned, DOGE is a volatile cryptocurrency, meaning the price can change unexpectedly. Therefore, before buying Dogecoin, research and apprehend potential losses.
Case in point: In 2021, DOGe was first approaching the $1 mark after getting a mention from Elon Musk during a Saturday Night Live show. At the time, it rallied to the $0.74 mark but later corrected by over 40%. DOGE has since been unable to clinch these record highs again.
Below is DOGE’s year-to-date price movement, clearly showing the volatile price action.
What Influences Dogecoin’s Price?
Several factors influence the price of Dogecoin. The first is the market sentiment. DOGE tends to rally when there are positive developments around the token. For instance, when top voices like Musk mention DOGE, it will record price gains.
Dogecoin’s price will also change depending on what people say on social media. Dogecoin has one of the most active communities on X (Twitter). If this community advocates for buying, it will tend to push the price of DOGE.
Lastly, the price of Dogecoin will change if the adoption of the coin of the underlying blockchain grows. The recent addition of DOGE payments on the Tesla website drove some gains for the meme coin.
How To Buy Dogecoin
To buy Dogecoin in 2024, you must first understand all the risks involved. You should note that DOGE is a highly volatile asset. You can quickly lose most or all of your investment.
Investing an amount you are willing to lose and consult with your financial advisor before investing a significant amount.
Below is a well-detailed step-by-step guide for beginners who want to buy Dogecoin.
Choose A Reputable Cryptocurrency Exchange
One of the daunting tasks for beginners looking to buy Dogecoin is picking a reputable cryptocurrency exchange. A cryptocurrency exchange is like a trading platform where you deposit funds and trade them for DOGE. It is best to look for a reputable exchange to find out where to buy Dogecoin.
Below are some factors to consider when picking a cryptocurrency exchange:
- Security – Security plays a vital role in the cryptocurrency industry due to the prevalence of scams and hacking attacks. You should research to uncover whether an exchange has previously been hacked. A good exchange should have robust security measures to prevent attacks, as seen in Gox’s collapse.
- Reputation – You should also check what other people who have previously used the exchange are saying about it. It is best to go with an exchange with many positive reviews from genuine users.
- Trading volumes – If an exchange has high trading volumes, it means many users are using it, and have a good reputation. High trading volumes on an exchange will also make entering and exiting traders easy.
- Fees – Most exchanges will charge a fee to trade. The fee will vary from one exchange to another. Pick the exchange with the most friendly fees to avoid being charged too much for transactions.
If the exchange you intend to use passes these checks, the last thing to do is ensure it is supported in your jurisdiction. Some exchanges may be banned in your country due to adherence to regulatory guidelines.
Open A Cryptocurrency Exchange Account
Once you pick an exchange, go to its website or mobile application (where applicable) to open an account. Creating an account will vary from one exchange to the other.
You will most likely need an email address to create an account. Remember to use a strong password that cannot easily be cracked.
Some exchanges have know-your-customer (KYC) processes, which will involve you verifying your identity. You must submit a government-issued document to confirm the names and details you provided. Exchanges increasingly ask customers to complete KYC because of anti-money laundering and counter-terrorism financing laws.
Deposit Funds Into Your Cryptocurrency Exchange Account
After opening your cryptocurrency exchange account, you should deposit funds into the account. If you already have a crypto wallet holding other cryptocurrencies, you can link it to the exchange and deposit tokens you will later exchange for DOGE.
You can use a debit card, credit card, or PayPal if you want to buy Dogecoin with fiat currency. After you link your card to the exchange, the amount you want to spend to buy Dogecoin will be deducted.
You can also buy Dogecoin with PayPal. However, this option might only be supported in some exchanges. To buy DOGE with PayPal, link the account to the exchange and select the amount you want to spend.
After you deposit funds into the exchange, the amount will be reflected on the exchange’s balance page. You need to discover whether the fiat currency you want to deposit is supported on the exchange. Most exchanges support leading currencies such as the USD and EUR.
Place An Order To Buy Dogecoin
Once you have funds in your account, the subsequent stage is to place an order to buy Dogecoin. If you are a beginner trader, you can place a market order. This type of order will be fulfilled at DOGE’s current price. For instance, if DOGE trades at $0.09, you will get tokens based on that price.
The other type of order you can create is a limit order. This type of order allows you to buy DOGE at a lower price than what the token is trading. For instance, if DOGE is trading at $0.09 and a trader believes the price will drop to $0.08, you can place a limit order that will be filled when DOGE drops to your expected price.
The stop-limit order is the third type you can place to buy Dogecoin. A stop-limit order allows you to set a price at which the exchange will automatically close your DOGE position if the price drops. It is recommended when you want to limit your losses from investing in Dogecoin.
Once you place your order and the exchange fulfills it, you will find the amount of DOGE tokens you bought displayed on your account.
Get A Crypto Wallet
You need a secure place to store DOGE and other cryptocurrencies. You can securely store Dogecoin in a cryptocurrency wallet. Store your tokens in a software wallet or a hardware wallet.
A software wallet or a hot wallet will store your DOGE tokens online. You will fund such types of wallets on exchanges. They also come in mobile applications. Software wallets are the best if you are a short-term trader. They make it easy for you to transfer tokens to and from the exchange.
A hardware wallet will store your crypto tokens offline. Most hardware wallets come in the form of a USB drive. It is the best wallet choice to hold your DOGE tokens for the long term or to hold a large amount of tokens.
Some practices you can use to improve the security of crypto assets include setting a strong password and practicing the best internet practices to avoid falling victim to malicious internet practices like phishing campaigns.
In Summary
Dogecoin is one of the rapidly growing meme coins in the market today. The coin has amassed popularity in the cryptocurrency community. It has one of the most vibrant communities, with the market sentiment influencing its price performance.
If you want to buy Dogecoin, it is best to understand the risks involved first. DOGE is a highly risky asset because of the volatile price movements. As a novice trader, you should know that losing all your money investing in DOGE is possible.
You can buy Dogecoin from cryptocurrency exchanges, like brokerage platforms allowing you to buy and sell DOGE. After purchasing, it is recommended that you store DOGE in a cryptocurrency wallet that will secure your holdings.
FAQs
What is Dogecoin?
Dogecoin is a dog-themed cryptocurrency with an active online community. It runs on a proof-of-work blockchain, just like Bitcoin. Dogecoin’s price can be highly volatile as it changes based on the market sentiment.
Who invented Dogecoin?
Jackson Palmer and Billy Markus created Dogecoin. The two made the coin in 2013 as an internet meme. However, it swiftly gained popularity and is now one of the biggest cryptocurrencies in the market today.
How does Dogecoin work?
Dogecoin works using a peer-to-peer network. By operating through blockchain technology, it is possible for people using the network to send funds to one another without relying on a third party.
Should I buy Dogecoin?
Dogecoin is a high-risk asset, and you should only buy the coin if you have a high-risk appetite. You should also note that the price of DOGE can change regularly based on market sentiment.
Is Dogecoin safe?
As an asset, Dogecoin is safe despite the high risk of investing. After investing in DOGE, you should know about the scams and frauds that often target cryptocurrency investors.
