Dogecoin has been able to maintain its reputation as memecoin for quite some time. In recent times, however, Dogecoin's performance has been disappointing for investors from a macro perspective.
Enthusiasts and long-term investors seem to have lost patience with cryptocurrencies for quite some time. To justify this sentiment, according to Ahrefs, "Should I sell my dogecoin?" Typed it into Google at least 2,900 times in a month.
So should you really sell your dogecoin in this situation? Also, where does Dogecoin fit into all this? Will it be able to sustain the emergence of new meme coins and keep investors enthusiastic? We'll find out.
Why are investors willing to sell their Dogecoin?
Dogecoin has experienced some big spikes, with prices rising 216% in January 2021. Tweets from Tesla co-founder Elon Musk have also made the cryptocurrency popular among first-time investors and instilled confidence in long-term investors.
But when it comes to fundamentals, there are some obvious issues that make investors think about better selling cryptocurrencies. Here are some questions that might make people consider selling their Dogecoin.
Lack of real world utility
Cryptocurrencies have gained popularity by becoming part of pop culture and as an overnight Internet sensation. Therefore, there is a lack of real world utility to some extent.
While Dogecoin's founders created Doge as a payment network, things didn't pan out accordingly. The overall acceptance and utility of cryptocurrencies is not yet that high.
An endless supply
The total supply of dog food is 100 billion pieces. However, as of now, it has 133 billion coins. Bitcoin, on the other hand, is unique in its limited supply of 21 million.
This goes beyond the basic concepts of economics. Since Dogecoin is not scarce, it has somewhat affected its value among the investor community. In short, the more Doge something is in circulation, the less valuable it is, and that is what has been happening so far.
Speculative assets
Dogecoin is a speculative asset. The currency has experienced some highly volatile surges and falls.
It's not the utility of cryptocurrencies that's driving people to buy it, but the promise of rising prices, which has seen prices soar. However, when it comes to the fundamentals of cryptocurrencies, investors aren't giving it much thought.
In the long run, Bitcoin's history makes people trust it, but no one in Doge has yet been able to gain that authority and goodwill.
Excessive market capitalization
Dogecoin currently has a market capitalization of $8 billion, making it the top 10 most valuable cryptocurrencies, according to CoinMarketCap.
With "sell" sentiment rising among older investors, buying Doge now doesn't seem like a prudent step. Moreover, investors who bought before Doge broke out are already selling their investments.
For now, it makes more sense to choose a cryptocurrency with a lower market cap, such as Tamadoge (TAMA). The best cryptocurrencies tend to be those that can be purchased during initial coin offerings or pre-sales at low valuations.
Selling Dogecoin: Should you buy it now?
When selling an investment in Dogecoin, investors should consider several things.
If an investor plans to invest it in another copycat coin with a relatively low market value, such as Tamadoge, it makes more sense to sell the Doge investment in the current period even if the token is in the red. It may even be the quickest way to recover losses from the Doge investment.
However, investors should conduct their own due diligence and research on the overall potential of cryptocurrencies and their investment strategies before making a decision to buy or sell.
Verdict: Sell Doge and invest in other Meme coins
When investing in meme coins, it tends to work best when entering the non-popular phase.
Once meme coins gained a feverish popularity, investing in them became more of a nuisance than a viable investment. Since most meme tokens have relatively low utility and take advantage of their virality, it's a bit like a social media trend.