Dogecoin ($ DOGE): How is it different from Bitcoin ($ BTC) and should you buy it?

Have you ever heard of the $ 50 billion joke?

In 2013, two friends created Dogecoin – a parody of a cryptocurrency that was supposed to be worthless. His mascot is a Shiba-Inu worthy of memes, who can’t really enchant or correct his grammar.

It certainly didn’t go unnoticed. The value of Dogecoin has increased by 18,000% in the last year. Even though Bitcoin fell dramatically over the weekend, Dogecoin traded close to historic highs. As Shiba-Inu would say, “Wow. Much inexplicable. ”

Elon Musk posts on Twitter about this. Dallas Mavericks owner Mark Cuban thinks it’s educational and fun. And Bull Crypto Mike Novogratz says he would be “very, very worried” if one of his friends invested in him.

On Tuesday, Dogecoin traded almost 35 cents. Previously, it rose by more than 42 cents – proof that not everyone takes into account Novogratz’s skepticism. Many even see unexpected gains.

Some retail investors take advantage …

Among them is Alyssa Vazquez, a 26-year-old accountant from Dallas.

Vazquez originally bought Dogecoin for $ 600 in January and February with her husband as a joke, thinking they wouldn’t probably get anything out of it. “When we started, we agreed that we would never put in more than we could afford to lose,” she said. Now they have grown to about $ 6,000.

“We got involved when GameStop disappeared. We started reading tweets about how this currency came about, “she said in a telephone interview. When the coin was collected, she was completely surprised. “My husband wrote to me, ‘Did you see that? “I was just shocked. ”

Vazquez and her husband had previously invested in Litecoin and Ethereum, but said they did not go much further. “I didn’t really trust her then,” she said. “The Bitcoin explosion has changed our minds.”

The couple tries to find the best time to get out of the Doge. They hope to use their earnings to pay off some debts, including student loans. But before that, they will probably buy more. And they have already started investing in another new cryptocurrency: SafeMoon. They put in about $ 500.

Brayden Johnson, 26, an electrician from Alberta, Canada, bought Dogecoin in memory of Shiba Inu, named Hudson, who died last year at the age of 15.

“Actually, I think of him whenever someone says the word doge,” Johnson wrote in an email. “I can imagine in my head every time I saw him make the stupid face of the meme and all the fur is wrapped around his collar.”

When Johnson saw that Dogecoin was big, he was very excited and didn’t expect to earn so much at such a fast pace.

“It feels good to be upstairs, because who couldn’t use some extra money?” he said. “It feels a little sweeter that an investment made because I missed my dog ​​paid such beautiful dividends.

… but why is this happening?

This week’s growth may seem confusing. How can a joke be worth so much?

FOMO has a lot to do with this.

“People are trying to recapture that magic that Bitcoin created for those who were there early,” said Michael O’Rourke, chief market strategist at JonesTrading. “The key differentiator here is that Bitcoin will be limited, there will be a limited number of currencies.”

Since its inception in 2009, Bitcoin has had a fixed supply of 21 million coins that will ever be invented. This is not the case for Dogecoin: there is no limit to the amount that can be created.

Burning enthusiasts could use this to make comparisons between Dogecoin and Fiat. Of course, there is no Bitcoin-like ceiling on the number of, say, dollars the US government can print. However, while Dogecoin has a lot of memes and jokes behind it, the dollar has the US economy and population. O’Rourke says this explains why there is so much confidence in the dollar.

“I still don’t know what Dogecoin’s purpose is but a speculative tool,” he said. “You speculate about something that exists there just because people speculate about it. It is a very dangerous mixture. ”

In addition, there was a campaign to raise the price of Dogecoin to 69 cents on or until April 20 – the holiday 4/20 associated with weed smoking.

Do you dare doges?

So, should you participate in the Dogecoin action?

“It’s almost irresponsible to give credence to speculation even by asking this question,” said David Trainer, chief executive of New Constructs, an independent Nashville-based securities research firm.

But people ask her after seeing their friends’ pocket money without doing so much work or research. The trainer says that everyone’s situation is different.

“If you have excess funds that you want to speculate with instead of betting on the Yankees and you want to put them in cryptocurrencies, then maybe, yes, it would make sense,” he said. “As long as you’re not afraid to lose everything.”