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Dogecoin is a meme-based cryptocurrency that recently took over the cryptocurrency market. Memes are very influential these days and the creator of the Dogecoin says that he created the cryptocurrency as a joke. The currency slowly increased its value and has managed to attract many influential investors. Recently, the market value of the Dogecoin hit the roof after Elon Musk invested in the asset and continuously backs the asset over other competitors in the industry. Since Elon Musk is such an influential person, many of his followers followed his example and invested in digital currency as well.
However, cryptocurrency investment expert Shay Benhamou believes that the Dogecoin is not up to par with other currencies. He shares the reasons and explanations behind why he thinks that people should not invest in Dogecoin. So, let’s review why the crypto investment expert believes that.
Why You Should Not Invest In Dogecoin
Unlimited Supply
The demand for cryptocurrency depends on how much of it is available. No one wants to buy an asset that has a huge supply. Shay Benhamou says that Bitcoin and other cryptocurrencies in high demand have limited supply which is why they are so sought after. If something is so readily available, it loses its value. Every minute, almost 10,000 Dogecoin are added to the network. This means that almost 5 billion Dogecoin are added to the network by miners every year.
Dogecoin does not have a store value because it was created with an inflationary model. This model was used to avoid the increasing transaction fee that comes with an increase in rewards. So, it is clear that not only does the unlimited supply of the asset reduce its value, it also lacks the technical finesse that other cryptos have.
Limited Use As Currency
The worst thing about Dogecoin is that it doesn’t have any real use. While other cryptocurrencies can be used to make payments, Dogecoin cannot be used for anything in online stores. Many businesses over the world accept Bitcoin and Ethrereum as payment and tips. However, Dogecoin, which has the second-largest crypto community after Bitcoin, is not accepted anywhere. The meme-based currency doesn’t have any assets linked to it not does it have proper blockchain setups. Shay Benhamou explains that this is why that this meme-based digital currency has limited and close-to-nothing utility value.
Its Popularity Is Influence-based
The surges in the market value of this meme-based cryptocurrency were initially due to it being a funny concept. The creator of the currency is reported to have said that he started the coin out as a joke which is why he didn’t pay much attention to the technical aspect and the utility functions of the crypto. The currency became popular after its launch because meme-related things tend to go viral really quickly.
The recent surge in the value of this cryptocurrency was due to the major investments and social media stances of the public figure Elon Musk. The influential personality has been actively preaching about the benefits of investing in Dogecoin on his social media profiles. However, after his encouragements stop, the popularity of the asset will also drop. This was the case before Elon Musk suddenly invested in the crypto. Dogecoin is a cryptocurrency whose popularity depends on who is buying or talking about it. Changes in the business world or political situations don’t have any impact on the status of this digital currency.
Final Thoughts
Statistically, Dogecoin is the cryptocurrency that people own the most after Bitcoin. However, just because the asset has a large community, it doesn’t mean that it is a worthwhile investment. Shay Benhamou believes that since the asset started out as a joke, it should be treated as one too. The recent surge in the asset’s popularity is due to investments from influential people. If you are serious about cryptocurrency investments, you should not waste your time or money by investing in the Dogecoin.
