1 Top Cryptocurrency to Buy Before It Soars 150%, According to a Popular Analyst

Dogecoin (DOGE 0.98%) went via some wild swings over the previous three years. The cryptocurrency was launched in 2013 as a parody of Bitcoin (BTC 0.42%) named after the Shiba Inu canine meme. It was solely value $0.01 firstly of 2021, however by Could 8 of that yr, it had soared to a file excessive of $0.73.

That rally was pushed by two important tailwinds. First, a mixture of social media buzz, low rates of interest, and stimulus checks sparked a shopping for frenzy in cryptocurrencies, meme shares, and different speculative investments in 2021. Second, celebrities like Elon Musk, Mark Cuban, and Snoop Dogg jumped on the bandwagon and promoted Dogecoin to their social media followers.

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However at this time, Dogecoin is just value about $0.16. Hovering rates of interest drove traders away from speculative investments like cryptocurrencies, and lots of the market’s smaller altcoins collapsed as a brand new crypto winter started.

Confronted with these challenges, many traders would possibly assume it is smarter to stay with “blue chip” cryptocurrencies like Bitcoin and Ether. Nonetheless, some traders consider that Dogecoin might nonetheless bounce again within the close to future.

Altcoin Sherpa, the alias for a intently adopted crypto analyst with almost 217,000 followers on X, just lately claimed that purchasing Dogecoin and anticipating it to rally about 150% to $0.40 was one of many “most secure trades” traders might make proper now. Let’s examine if that outlook makes any sense — and if traders must be extra bullish on this unstable meme coin.

What’s the bullish case for Dogecoin?

Altcoin Sherpa’s bullish case for Dogecoin relies on the assumption that retail traders will purchase it once more, that it has nice liquidity and low draw back relative to different meme cash, and that it is extra interesting than lots of the smaller altcoins.

He additionally believes that each one it takes will likely be one tweet from Elon Musk to “blow it up.” Prior to now, a number of of Musk’s tweets about Dogecoin — together with Tesla‘s acceptance of Dogecoin funds and a short lived change of Twitter’s emblem right into a Shiba Inu final yr (previous to its rebranding as X) — all boosted the meme coin’s worth.

However Dogecoin nonetheless has fewer catalysts than different cryptocurrencies

Dogecoin is perhaps extra secure than different smaller altcoins, however it additionally has fewer long-term catalysts than Bitcoin and Ether. It is now accepted as a cost technique at just a few companies, however its unstable worth nonetheless makes it extra of a publicity stunt than a sensible cost choice for many prospects.

The regulators additionally do not appear too impressed with Dogecoin. Final September, the New York State Division of Monetary Companies excluded Dogecoin from its “inexperienced checklist” of eight regulated cryptocurrencies — which embody Bitcoin, Ether, and 6 stablecoins from PayPal and Gemini. That exclusion suggests it is nonetheless a extremely speculative funding.

Dogecoin’s blockchain platform additionally cannot be natively used to develop decentralized purposes. That is as a result of it was initially forked from Bitcoin’s blockchain, which does not assist the event of apps, and makes use of the identical energy-intensive proof of labor (PoW) technique to mine its tokens.

By comparability, Ethereum, Solana, and Cardano all use the extra energy-efficient proof of stake (PoS) technique, which has been extensively adopted for the event of decentralized apps and smaller tokens. Dogecoin’s backers subsequently launched Dogechain, a separate blockchain community to assist Dogecoin-based apps, however it is not as extensively used as different decentralized platforms.

There’s additionally proof that traders are merely dropping curiosity in Musk’s views on Dogecoin. This April, he randomly tweeted about its rising reputation, however its worth barely budged. That waning curiosity counters Altcoin Sherpa’s opinion that “all it takes” to elevate Dogecoin can be one other bullish tweet from Musk.

Traders must be skeptical of Dogecoin’s future

Dogecoin might need a brighter future than lots of the market’s smaller altcoins, however I can not confidently say that it’ll soar 150% within the close to future. Rates of interest are nonetheless excessive, and the brand new Bitcoin ETFs and upcoming Ether ETFs might pull quite a lot of traders away from smaller altcoins and meme cash even because the crypto winter ends.

So as an alternative of following pseudonymous crypto analysts with a big social media viewers, traders ought to carry out their very own due diligence and perceive that Dogecoin might simply expertise a 50% decline in worth earlier than it doubles or triples on this difficult market.