Love It or Hate It, Dogecoin Remains a Viable Investment Vehicle
Dogecoin (CCC:DOGE-USD) bulls have been in charge throughout October. They managed to rally more than 30% — twice — and they’re still above that 20 cent baseline. This may enable them to finally break out of the resistance going into 28 cents per coin. But threats to its success still remain.
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That’s especially true given what we learned from Robinhood’s (NASDAQ:HOOD) earnings. HOOD tumbled on deteriorating metrics. A drop in the DOGE trading was among the main reasons for its lackluster results.
This is something to monitor while we discuss the future of DOGE coin.
Ultimately, I believe DOGE will remain viable for as long as it has fans. My trading habits with it are simple and purely based on charts. They have been successful so far, so I have no reason to change.
When we discuss cryptocurrencies we must also justify their existence to skeptics.
Crypto Is Here to Stay … Will Dogecoin Endure?
If you’ve been reading my articles for a while, then you’re probably sick of my arguments for the viability of crypto. Today, I am approaching things differently. First, I’d like to convey that investing in crypto is a viable thesis for the future. Second, I will examine the opportunity that resides in Dogecoin specifically.
But before we continue I would like to disclose that I am not your typical crypto cheerleader. I have embraced its existence, and I believe that it will play an important role in shaping future finance. I understand the mass hesitation to accept this “fake currency” — heck, I even see it in my family!
With that said, let’s try and break down a few barriers today.
First, DOGE is not currency, nor does it need to be. In fact, we would do well to stop referring to the cohort as cryptocurrency. Trying to find efficient ways to price things in crypto coins is insanely difficult. They move too fast for it to be an effective daily form of tender.
Secondly, let’s stop avoiding it because it is “fake.” If we use the qualifier that humans created them, then everything we own is also fake. And here’s the real kicker: Who cares?
I don’t need to know if it’s real or fake in order to profit from its value. If I don’t like art, yet I find a bargain on a painting in demand, I would buy it. I know it has value to someone out there; therefore, I can profit from it.
That’s the point of investing in general.
The DOGE Thesis Is Viable
Dogecoin is a crypto, so it absolutely has viable investment potential. Again, our opinions of how real or fake it is are irrelevant. It is a thing and there are millions who want it, so it will retain value.
I am very confident that the hard-line haters will be wrong in the long term about Bitcoin (CCC:BTC-USD). Collectively, their market capitalization is over a $2.5 trillion. If you accumulate $1 million per day, it would take you 2740 years to have a trillion.
No one can fake that much wealth.
Let’s bring the conversation back to DOGE. I profess that it’s not my favorite from an investment perspective. I simply don’t see the sustainability of its use case. The caveat here is that I am not an expert on the intricacies of the topic. But what I do know is enough for me to favor Solana (CCC:SOL-USD) best and Ethereum (CCC:ETH-USD) second. Doge comes fourth, even after Cardano (CCC:ADA-USD). Solana is the one I would accumulate for the next five years.
I have successfully traded Dogecoin in the past. In fact I haven’t had a losing trade yet, because I buy it when the people panic. On really bad days, it makes sense too seek entries. I made this point in July and that yielded an easy double.
Find the Proper Levels to Trade
Source: Charts by TradingView
From a level perspective, I set my alerts under 19 cents. Lately, more headline attention is going to Shiba Inu (CCC:SHIB-USD). Ironically the cause for this are tweets from Tesla (NASDAQ:TSLA) CEO Elon Musk. Last year, he put the spotlight on DOGE. Now he is taking it back.
I don’t myself ever accumulating DOGE over time, but I will continue to trade it.
On the other hand, I find value in collecting SOL-USD and maybe ETH-USD. Each seems to offer long-term, viable applications in fintech. Keep in mind that this is just one man’s opinion, so I don’t fault anyone who thinks otherwise. Buying Dogecoin for the long term can make sense for the right person.
My primary goal today was to breakdown psychological barriers that keep people out of crypto. The first step is so easy, but seems huge: Simply opening an account can be daunting the first time. I spent too long doing too much homework. In the end, I jumped into one platform because of a recommendation from a friend. You can find your own, and I usually fall back on the top three.
Bonus Fixed Income
In closing, I’m going to give you a golden nugget of information. I would suggest that you also learn about “staking.”
This is a term in crypto that is equivalent to the old school CD accounts. Since the whole “crypto-sphere” is still so new, the coin issuers are rewarding us for our commitment. I can currently receive a 10% reward in a stable coin, if I promise to hold it for three months. Granted these are risky assets without FDIC insurance like what bank accounts gave. Nevertheless, I consider it as a trade with a guaranteed 10% short of a company going out of business.
On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Nicolas Chahine is the managing director of SellSpreads.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.