A view of Dogecoin commemorative coins, Yichang, central China’s Hubei Province, May 9, 2021.
Costfoto / Barcroft Media via Getty Images
The rally pushed the market capitalization of the coin to nearly 44 billion US dollars, which according to CoinMarketCap ranks it among the top 10 cryptocurrencies alongside Bitcoin, Ethereum, Binance Coin and Tether. In the past seven days, Dogecoin has rebounded by more than 40%.
Still, the cryptocurrency is far from its all-time high of around 73 cents per coin, which it hit in May.
Even during the comeback rally, experts are warning investors not to get into Dogecoin just to make money. Cryptocurrencies are very volatile, which means that the current streak could reverse at any time.
Invest only what you are willing to lose
Financial experts generally advise that people looking to invest in cryptocurrencies should only allocate a small portion of their portfolio to the asset. The UK’s Financial Conduct Authority has issued a similar warning.
“Never invest anything you don’t want to lose,” said Ben Weiss, co-founder and CEO of CoinFlip, one of the largest Bitcoin ATM companies in the US
“If you like Dogecoin and think it could be a viable currency in the future, or are fans of the idea and the movement, then invest in it,” he said. “If you don’t like it or think it’s a fad, don’t invest in it.”
He also warned first-time cryptocurrency buyers not to dive straight into Dogecoin without investing in other coins. Bitcoin has a 10-year track record at this point, which puts it on a different level of risk than investing in a newer alternative coin.
And investors shouldn’t get into Dogecoin just to make a profit in a short period of time.
“If any part of your brain says, ‘This is a great way to make money, fast,’ think twice,” he said.
Buy long term
Weiss is, of course, a proponent of investing in cryptocurrencies and Dogecoin, and recommends all investors to hold some digital coins, even if it’s only a small part of their portfolio.
“You never want to do without it entirely,” he said. “You step up more and more for the things that you don’t do and the opportunities that you miss.”
Those looking to invest in various digital coins should assess where they stand with other personal financial and investment goals to determine if they have some extra cash for a risky asset.
Never invest anything that you don’t want to lose.
CoinFlip CEO and Co-Founder