My opinion on cryptocurrency used to be incredibly bearish if we're talking back in 2017-18 after Bitcoin hit over $19,000. An unregulated market and currency became a hub for black market deals as it could not be tracked. But now my opinion has changed a bit for a few reasons: 'safe-haven' pairs weaken like USD, FOMO, and hype apparently outpaces logic.
Prices came up to a yearly high yesterday to $0.0052, originally at $0.0020 before a massive amount of buyers stepped in. Shortly after, traders clearly took profit, and the price dipped down to $0.0030s. Right now, dogecoin is up over 416% from lows after several TikToks and memes become some of the greatest market analysts in the world. As ridiculous as it sounds, it's comically true.
Anyone can bash crypto as much as they want, but the price defied all crypto bears. I mean, who doesn't want to be a part of a trade that moves 400% percent in a few days? This largely has to do with audience. Who do you think is making trades like this? It's not billionaire investors or people running hedge funds; they are probably young, speculative investors who want to get rich quick. If you keep up with stocks, you might have seen Hertz stock soar over 100% as the company is facing bankruptcy. With millions of young investors who have incredibly easy access to markets now are seeing an ultra cheap price along with talks about it on social media, it becomes an indicator in itself on what to buy. It's similar to reading 13F filings on institutions to see what stocks they bought last quarter. People often read Warren Buffet's 13Fs to essentially copy what he does. I realized that you can do this in the same way but by using social media platforms like Instagram or TikTok, which leads me into my next point.
Fear of missing out is a huge issue now as chasing prices can actually work in these weird market times. We watched as Nikola Motors announced that they will start manufacturing their new pick-up truck and begin sales in the near future. The stock price went from the $30s to peak at $95 before selling off back to the $50s. That means lots of money was poured in the stock even after the shareholders' vote passed the merger, and people were buying in the $60s, all the way up to the $90s. If that's not chasing price then I don't know what is. This is the kind of behavior happening with dogecoin.
When the US took measures to stabilize their economy, trillions of dollars were created to provide funds for the unemployed and businesses as well as the Fed's $7 trillion balance sheet. Other countries did the same strategy of causing inflation to their currency, but none were on this level. Like metals, crypto is another place people might transfer their money into when fiat money begins to hurt.
As far as fundamentals go, I have none on dogecoin. All I know is that it is a meme that became legit according to the investors that brought it up over 400%. Analysts are still ranking it a buy regardless of the move it just made.
What I think
Cryptocurrency as a whole is speculative, but so are investments like Tesla. If you can know where money is flowing, or at least speculate, your trades could end up becoming very profitable. I'm not telling anyone to buy dogecoin, but as crypto progresses, it will become more and more relevant over time. If I'm feeling frisky, I might put some play money into doge for the fun of it. After all, $20 in this crypto is around 6,000 units of dogecoin.
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