1 Top Cryptocurrency to Buy Before It Soars 150%, According to a Popular Analyst – The Motley Fool

Dogecoin (Doge -0.02%) It has undergone a lot of change in the past three years. This cryptocurrency was launched in 2013 as a parody of Bitcoin. Bitcoin (BTC 0.03%) Named after the Shiba Inu meme, it was just $0.01 at the start of 2021 but skyrocketed to an all-time high of $0.73 by May 8 of that year.

The rally was driven by two main tailwinds: First, a combination of social media buzz, low interest rates and stimulus checks sparked a buying frenzy of cryptocurrencies, meme stocks and other speculative investments in 2021. Second, celebrities like Elon Musk, Mark Cuban and Snoop Dogg jumped on the bandwagon, promoting Dogecoin to their social media followers.

However, today, Dogecoin is worth just $0.16. High interest rates have driven investors away from speculative investments like cryptocurrencies, and the start of a new crypto winter has seen many of the market’s smaller altcoins collapse.

Faced with these challenges, many investors are turning to Bitcoin and etherHowever, some investors believe that Dogecoin may recover in the near future.

Altcoin Sherpa, the alias of a noted cryptocurrency analyst with around 217,000 followers on X, recently argued that buying Dogecoin and expecting it to rise around 150% to $0.40 is one of the “safest trades” investors can make right now. Let’s take a look at whether this outlook makes sense and whether investors should become more bullish on the volatile meme coin.

What makes Dogecoin bullish?

Altcoin Sherpa’s bullish case for Dogecoin is based on the belief that retail investors will buy again, that it has greater liquidity and lower downside risk than other meme coins, and that it is more attractive than many smaller altcoins.

He also believes it will “explode” with just one tweet from Elon Musk, as Musk has done with several tweets about Dogecoin in the past. TeslaTwitter’s acceptance of Dogecoin as payment and the social network’s temporary change of logo to a Shiba Inu last year (before Twitter rebranded to X) have boosted the meme coin’s price.

However, Dogecoin has seen fewer catalysts than other cryptocurrencies.

Dogecoin may be more stable than other smaller altcoins, but it has fewer long-term catalysts than Bitcoin and Ethereum. It is currently accepted as a payment method by several businesses, but its price volatility makes it more of a PR stunt than a viable payment option for most customers.

Regulators also seem less than impressed with Dogecoin: Last September, the New York State Department of Financial Services removed it from its “green list” of eight regulated cryptocurrencies, which included Bitcoin, Ethereum, and six US stablecoins. PayPal and GeminiThis exclusion suggests that it remains a highly speculative investment.

Dogecoin’s blockchain platform also cannot be used natively to develop decentralized applications because it was originally forked from Bitcoin’s blockchain, which did not support app development, and it uses the same energy-intensive Proof-of-Work (PoW) method for mining tokens.

In comparison, Ethereum: Solanaand Cardano Both use a more energy-efficient proof-of-stake (PoS) methodology and are widely adopted for the development of decentralized apps and smaller tokens. Dogecoin backers have since launched another blockchain network, Dogechain, which supports Dogecoin-based apps, but it is not as widely used as other decentralized platforms.

There is also evidence that investors are losing interest in Musk’s views on Dogecoin. In April of this year, he casually tweeted about the coin’s growing popularity, but the price barely budged. This lack of interest contradicts Altcoin Sherpa’s suggestion that all it takes for Dogecoin to rise is one more bullish tweet from Musk.

Investors should be skeptical of Dogecoin’s future

Dogecoin may have a brighter future than many of the smaller altcoins on the market, but we can’t confidently say it will skyrocket 150% in the near future. Interest rates remain high, and a new Bitcoin ETF and upcoming Ethereum ETF could lure many investors away from smaller altcoins and meme coins even after the crypto winter is over.

Therefore, rather than following anonymous crypto analysts with large followings on social media, investors should conduct their own due diligence and understand that in this tough market, Dogecoin could easily experience a 50% drop in value before doubling or tripling in value.