“Should I Buy Dogecoin?”
Posted November 25, 2024
Davis Wilson
Davis is on a mission to turn $100,000 into $1 million. Follow along with his journey and get the opportunity to follow along in your own portfolio for free by clicking here.
“Should I buy Dogecoin?”
My cousin Devin asked me this question over the weekend.
He’s new to investing, but he’s had some quick success.
Over the last few weeks he’s made a few thousand dollars trading.
It helps that most assets have gone vertical over this period, especially some of the meme-ier stocks/cryptos he’s been trading.
Dogecoin is the meme cryptocurrency frequently promoted by Elon Musk. It’s up 200% in the last month following the election.
What’s interesting about Dogecoin – and many cryptocurrencies for that matter – is that its founders have been outspoken about how the coin was created as a complete joke.
It’s named after an internet meme centered around the image of a Shiba Inu dog with bad spelling habits – thus “doge” instead of “dog.”
Even the way people originally obtained the coin was meant to be a joke: In return for solving mathematical puzzles, dogecoin miners operating fast-running computers received anywhere from one dogecoin to hundreds of thousands of dogecoins.
I explained this to Devin.
“So… should I buy it?” he responded…
**facepalm**
I then explained something even more important – how he could figure out whether to buy Dogecoin on his own.
I told him to pull up a 5-year chart of the coin.
“Point to when you wish you would’ve bought Dogecoin,” I said.
Of course he pointed to the low points – 2020 when it was trading for just a fraction of a cent, mid-2022, and 2023 when the coin was flatlining.
“Now find the news about Dogecoin at those times,” I said.
I gave him a few minutes to search.
He couldn’t find any meaningful Dogecoin news in 2020. Not surprising since nobody knew about it then.
2022 was similar, though.
That year, Dogecoin traded at its lowest levels the week of June 14th - 21st. It took some searching to find any Dogecoin articles written that week, but here’s what he came up with:
Crypto contagion fears spread after Celsius Network freezes withdrawals – Reuters
Elon Musk pyramid scheme lawsuit: All times Musk promoted Dogecoin – Indian Express
The two news stories he found weren’t very positive.
2023 was the same story.
That year, Dogecoin traded at its lowest levels the week of October 10th - 17th. He couldn’t find any Dogecoin-related articles posted that week except for one:
How to Short Dogecoin (Get High ROI on DOGE) – Cryptopolitan
Note: “Shorting” is a bet the price will decline. Not great for Dogecoin’s prospects if this is the only news that week.
The point I was trying to make to Devin was that during the three times he wished he bought Dogecoin, nobody was talking about Dogecoin.
You can see this by overlaying the price of Dogecoin with Google searches for the term “Dogecoin.”
They track almost identically.
If you told anyone in 2020, mid-2022, or 2023 that you were buying Dogecoin, they’d look at you like you had three heads and make a mental note to never ask you for financial advice ever again.
That’s because people love to talk about “hot stocks,” and Dogecoin definitely wasn’t “hot” during those time periods.
History says that’s the time to buy, though… when nobody is talking about it.
I explained this to Devin over the weekend – so he didn’t buy Dogecoin.