Crypto Market : Looking Beyond the Dogecoin Hype, Dogecoin price , News today, INR

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After Bitcoin, crypto investors and media houses have a new favourite in town; Dogecoin. The cryptocurrency has attracted a lot of eyeballs because of its surge. It grew over 5000% in 2021, with a 400% gain in just 30 days. These sky-high gains have stirred up many investors to buy into DOGE, a result of which is evident on platforms like CoinSwitch Kuber that are experiencing boosted engagement from its users. But is this cryptocurrency really worth the hype? Let’s find out.

Bang for the buck?
Before Dogecoin, Bitcoin, too, rallied aggressively, touching new highs almost every other day, luring investors into the cryptocurrency space. While both of these incidents might look similar on the surface, they aren’t really similar.

Bitcoin is a long-trusted and reliable cryptocurrency. It paved the way for other cryptocurrencies that we have around and was created by the best of the minds with a definite purpose to improve on paper money’s shortcomings. More importantly, it was very well thought of, keeping in mind its security, supply, and other factors.

On the other hand, Dogecoin was created back in 2013 by Jackson Palmer and Billy Markus as a joke inspired by the meme dog, Shiba Inu. They intended to dig at investors who invest in assets mindlessly, which is, ironically, exactly happening right now.

And since the founders didn’t really have any other intent but to have fun with the crypto, they aren’t likely too serious about it. At one point, they even tried moving away from the project.

The drivers of Bitcoin and Dogecoin


The fundamental drivers of Bitcoin’s rally:

  • Bitcoin underwent halving in May 2020, a phenomenon that reduces the supply of new Bitcoins in circulation ending up rallying its prices.
  • A massive institutional adoption drove its price where companies like Greyscale, MicroStrategy, Tesla etc turned to it.
  • Covid to some extent also helped fire up Bitcoin investing.

On the flip side, DOGE’s rally started for no foundational reason:

  • It all started after the entire GameStop incident. A bunch of retail traders got together on Reddit and decided to push up its share prices. Taking a leaf from the same book, a subreddit with DOGE fans decided to also rally DOGE’s price to make it touch $1.
  • The pump was further amplified by influential personalities like Elon Musk, Gene Simmons, Carole Baskin etc., on Twitter.

What makes a worthy Crypto?


The underlying purpose: Cryptocurrencies derive much of their value from the underlying project it is attached to. Most cryptocurrencies are associated with a project on the blockchain network trying to solve real-world problems. As these projects prove their efficiency and gain popularity, it channels its value to the native token of the project, a cryptocurrency.

For instance, BAT token is cryptocurrency attached to a project called Brave browser on the blockchain. The purpose of Brave browser is to price user attention correctly and compensate people for viewing ads. As the project develops and gains more traction, you will also notice the price of the cryptocurrency attached being influenced.

The team working on the project: No matter how good the idea is, a bad team will not be able to pull it off, but a good team can take projects through the roof.

As much as it is important to have a robust project attached to crypto, the team working on the idea is equally important. Additionally, knowing the team allows you to get a sense of their expertise and the goodwill they may bring to the table. It also works as a background check to ensure that the project is trustworthy.

For example; The founder of Tron, Justin Sun, brings a lot of credibility to the project and builds trust because of his technical expertise.

Its availability: Another factor that you might want to consider while evaluating a cryptocurrency is its availability. It’s pure economics here; the greater the demand for an item and the lower the supply for it, the higher the price of an item and vice versa.

Think about it, one of the fundamental reasons driving Bitcoin’s price is its scarce nature. There can only ever be 21 million Bitcoins, and while the supply for it is shrinking every day as more and more people invest in it, the demand for it is increasing.

While Dogecoin, on the other hand, does not have any such limit on its supply, there can be infinite DOGE coins.

Market trends: This is also one of the important aspects to look at in order to speculate where a cryptocurrency is heading. It helps investors to ascertain how a cryptocurrency behaves in certain situations. One might have done their research on the all above areas but studying the market behaviour could put them one step ahead.

Studying the past performance of a cryptocurrency may help investors forecast its future. But one thing to be wary of while analysing the trends is that these could be sometimes influenced by pump and dump strategies, also like what we are experiencing with DOGE now.

Investing in Cryptocurrencies
Investing in Crypto is no different than stocks; it’s the same ball game. People fail when they think of crypto as a ‘get rich quick’ scheme because it’s not.

Like how one researches a stock thoroughly before investing, they shall also research the crypto they are investing in. It’s almost all the same drivers here too. The only difference is that the market is a little more volatile.

Also, crypto investments can start from a minimum amount of Rs.100 with cryptocurrency platforms like CoinSwitch Kuber. Investors could see success with cryptocurrencies if they are prepared and disciplined with their investing strategy and are not just trying to make a quick buck.

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