2021 was the year of the cryptocurrency, with popular coins like bitcoin and ethereum rising to all-time highs. Of course, Bitcoin and Ethereum have “proven themselves” to some extent in the world of crypto, and hence their rise should not have come as much of a surprise. However, when it comes to investing in cryptocurrencies, there is one coin that has genuinely shocked the world: Dogecoin.
Dogecoin is up over 7,000% in the first half of 2021 and has gained support from big names in investment/leadership including Elon Musk and Mark Cuban. Initially, Dogecoin was nothing more than a virtual meme-currency that caught the attention of Generation Zers, millennials and celebrities, propelling it into the mainstream cryptocurrency market.
With so much movement and chatter about Dogecoin, it is understandable to want to keep up with the Joneses and know how to buy Dogecoin. (If you had invested $1,000 at the beginning of the year and sold it in December, you would have increased your money by at least 30 times). This post will cover everything you need to know before buying Dogecoin and provide instructions on how to buy Dogecoin. Ready to learn more about this Shiba Inu inspired coin? Let’s get right into it.
What is dogecoin?
When it comes to currencies like Dogecoin, it’s important to understand the basics before diving into them.
Dogecoin is a cryptocurrency created in 2013 by software engineers Billy Markus and Jackson Palmer as a joke. They decided to name the coin after the popular meme “doge” (with the image of a Shiba Inu dog).
For many years, the value of the coin has remained relatively unchanged, and there has been no significant increase. However, in 2021, Dogecoin has gained a lot of fans and its market capitalization has grown to $36 billion. How? Thanks to the support of the coin by such famous celebrities and businessmen as Elon Musk, Mark Cuban and even Snoop Dogg. Today, the digital currency has a huge community and the general market attitude towards Dogecoin is becoming more and more favorable.
Should you buy Dogecoin at all?
With strong performance in 2021 (and a lot of media hype), Dogecoin may seem like a desirable option for investors looking to access the cryptocurrency market and accumulate wealth.
That being said, it is important to remember that investing in Dogecoin is like investing in any other instrument: you need to do your research and set realistic expectations.
Unlike stocks (and the US dollar), the cryptocurrency market is decentralized and completely peer-to-peer, which means that traders have the potential to make some serious profits, but they also have little protection if you are scammed and you lose everything.
In addition, Dogecoin has a very high value (at the time of this writing). It has no stock returns to support its market cap (in other words, Dogecoin is fueled solely by investor sentiment). Much of his movement is based on more well-known cryptocurrencies (such as the price of bitcoin) and how often Dogecoin is mentioned in the media.
That being said, the future of Dogecoin remains quite optimistic as it continues to be added to various trading platforms as major digital currencies such as Bitcoin continue to rise in value.
How to buy Dogecoin: step by step
So, you’ve done your research and decided that you want to buy Dogecoin, whether it’s entering the digital coin market, purchasing virtual money, or adding coins to your wallet and earning interest. You will probably be wondering exactly how to buy Dogecoin. Here’s how to do it, step by step.
Decide on the amount
Before you dive into Dogecoin, make sure you decide on a reasonable amount that you are going to buy. When considering this question, try to consider several of the following factors:
- What do you know about cryptocurrency (what is a ledger? what about a mining pool or bitcoin exchange?)
- What purpose does Dogecoin serve in your portfolio?
- How much volatility are you willing to handle (since most virtual currencies are known to be highly volatile)
- What is your risk tolerance?
Experts recommend not investing more in cryptocurrencies than you can afford to lose. If you’re looking for inspiration when it comes to investing, check out these interesting investment quotes.
Choose a cryptocurrency exchange
To buy Dogecoin, you need to open an account on a cryptocurrency exchange. This exchange is an online marketplace where buyers and sellers meet to buy and sell cryptocurrencies. Some popular exchanges include Coinbase, Binance, and Kraken.
If you don’t want to bother opening an account, you can also consider using the investment platforms you already have. For example, some brokerages such as Robinhood allow you to buy cryptocurrencies directly on their platform.
Just make sure whatever exchange (coin exchange) platform you choose offers Dogecoin. Although Dogecoin has gained immense popularity, it is not yet on all exchanges.
Select a Payment Method
Before buying any cryptocurrency or making transactions, you need to deposit some amount of money into your account. Most exchanges allow you to deposit money directly from a checking or savings account. Some accept bank transfers or PayPal transfers.
As a rule, your money will be available immediately after you make a bank transfer. However, in some cases (especially if you are depositing more than $1,000) you may need to wait a few days for your transfer to be cleared before purchasing digital coins.
Place an order for Dogecoin
Once your money is in your account, you can place an order for Dogecoin. You can search for Dogecoin by its name or by entering its ticker: DOGE. Then enter how much Dogecoin you want to buy (or how much in dollars you want to pay) and your anonymous Dogecoin purchase should go through.
Most of the systems work on instant exchange, which means that you will receive coins when you place an order. Like other assets that are not centralized, you can buy Dogecoin 24/7 (which makes cryptocurrency trading and cryptocurrency mining even more exciting).
Consider holding Dogecoin
When you buy Dogecoin, it is usually stored directly on the exchange where you made the purchase. However, some people prefer to store their coins in a cryptocurrency (or blockchain) wallet. They are designed to prevent thieves (hackers) from stealing your digital money, such as real wallets.
When choosing wallet software, you can choose between a hot wallet or a cold wallet. A hot wallet is an online wallet because it is still connected to the internet. In contrast, a cold wallet (or cold storage) is typically a piece of physical hardware that can be turned off (making it less vulnerable to hacking). However, a cold wallet is generally more expensive than a web wallet, and you run the risk of forgetting the password needed to access the wallet.
How to sell Dogecoin
While it does take a few steps to buy Dogecoin, the process of selling Dogecoin is quite simple. All you have to do is go to your exchange website (foreign exchange market), enter the amount you want to sell, click “Confirm” and your order will be shipped and processed.
Although Dogecoin is not a fiat currency (and the blockchain is considered “untraceable” due to anonymity), you will probably have to pay capital gains tax if you make money online by selling it. Virtual Coins can still make you money, and any money you earn is subject to the same tax rules as your regular income. If you are unsure how to report profits generated from your Dogecoin trades, be sure to consult with a tax professional.
Summary: How to Buy Dogecoin
With the rise in the value of bitcoin and ethereum, many investors have been looking for an alternative way to break into the cryptocurrency market. After all, who doesn’t want to have the potential to take $100 and turn it into $10,000?
Although Dogecoin originally started out as a joke, over the past year it has gained a lot of support and built a strong community around it. Because of this (as well as the ripple effect of having so many famous celebrities backing it), the price of Dogecoin skyrocketed and made people huge profits.
However, this is a risky investment and experts warn that you should only invest what you are willing to lose. Crypto newbies with no experience and low risk are likely to allocate a different percentage of their portfolio than younger crypto veterans who can weather tons of volatility.
If you REALLY decide to buy Dogecoin, we hope this post helped clear up your doubts. As a quick overview, here are the five steps you need to follow to invest in Dogecoin:
- Determine the amount of money you are willing to invest in Dogecoin.
- Choose a cryptocurrency exchange or brokerage company (that has Dogecoin).
- Choose a payment method and fill money into your account.
- Make an order or Dogecoin!
- Consider keeping Dogecoin in your wallet for more security (as well as potential interest).
So, here it is: how to buy Dogecoin, step by step. As always, be sure to do your research before making any financial decisions. That being said, once you’ve decided on the right amount to invest in, don’t be afraid to dive into it. Who knows, maybe Dogecoin will rise another 5000% in 2022!
This post originally appeared on Wealth of Geeks.