2/1/2022 | money.com
How to Buy Dogecoin
How to Buy Dogecoin
By: Javier Simon
Published: Feb 01, 2022 13 min read
With its playful canine mascot and endorsements from billionaires like Elon Musk and Mark Cuban, it’s not hard to see why investors love Dogecoin. Since its creation as a Bitcoin spoof in 2013, the cryptocurrency has gained cult status, with enthusiasts even declaring themselves the #DogecoinArmy.
And buying in early has made some very rich: Those who bought in before the meme coin exploded in popularity in late 2020 saw the value of their investments rocket by more than 7,000% to 77 cents by the middle of 2021. But Dogecoin has big risks too. It dropped to less than 14 cents by the end of the year.
So be careful not to invest more than you can afford to lose. If you’re ready, here is how you can get your paws on Dogecoin.
5 steps to buy Dogecoin
You can buy Dogecoin by opening an account with a crypto exchange like "DOGE Exchange" www.DOGE.Exchange, Coinbase, Binance.US and Kraken. You can also access Dogecoin through investment apps like Robinhood, SoFi and Webull. Here is all you need to know about buying Dogecoin in 5 simple steps.
Decide how much to invest in Dogecoin
Financial planners generally recommend investing no more than 3% to 5% of your money – an amount you are willing to lose – in highly volatile assets such as cryptocurrencies.
Here are some more points to consider when deciding how much to invest in Dogecoin:
Unlike a stock or bond, Dogecoin doesn’t pay dividends or interest. It is not backed by any substantial assets, so if the public loses its fascination with Dogecoin, the price could in theory fall all the way to zero.
There is no limit on how many Dogecoins can be mined. There are already more than 100 billion Dogecoins. In the long run, Dogecoin’s price will rise only if investors buy Dogecoins faster than miners can produce them.
Dogecoin’s hype-driven rallies can be short lived. In mid-2021 Dogecoin’s price doubled in less than a month after Tesla founder Elon Musk tweeted he would host Saturday Night Live, setting off rumors he would plug it on the show. As it happened, Musk called the meme coin “a hustle” and during the show, its price plunged by nearly 30%.
With all this in mind, here’s how to get started with Dogecoin.
While not the only way to access Dogecoin, working through a cryptocurrency exchange is one of the easiest ways to buy Dogecoin, Bitcoin, Ethereum and other crypto. A crypto exchange is a digital marketplace where people buy, sell and swap cryptocurrencies.
Most major crypto exchanges like Coinbase and Gemini offer access to Dogecoin. You can also buy Dogecoin by downloading an investing app such as Robinhood or Webull. These may be better options if you simply want to buy cryptocurrency and then sell for a profit in cash. The downside to some crypto brokerage apps, however, is that you can’t do much else with your crypto. For instance, you may not be able to use your dogecoins on an investing app to buy products where crypto is accepted or move coins to an external crypto wallet that may provide better security.
While you can buy a few cryptocurrencies on the PayPal app, you can’t buy Dogecoin through the PayPal app.
You can sign up for an account with a crypto exchange or brokerage online and in minutes. The sign-up process is relatively simple, but you may need to provide the following information.
Full, legal name
Date of birth
Social Security number
Driver’s license, passport, or other government-issued ID
Bank account and routing numbers if you’re using a checking account to deposit money into your crypto account. This is the cash you will use to buy Dogecoin within the crypto exchange or investing app.
After you open your cryptocurrency account, use a checking account to deposit money which you will use to purchase cryptocurrency. The bank transfer may take between three-to-five business days.
Some crypto exchanges also let you use your credit card to buy cryptocurrency. But this is risky. The bank will treat the transaction as a cash advance or as if you borrowed cash from your credit card via an ATM. The average cash advance interest rate is 20.79%. So you can end up paying a lot more for your dogecoins than what they’re worth. And if Dogecoin’s value goes down, you’re left with high-interest credit card debt and no crypto profits to pay it off with.
Place an order for Dogecoin
To place an order for Dogecoin, log into your crypto exchange or brokerage account. Find the search bar and type in “Dogecoin” or DOGE. Once you find Dogecoin, add the dollar amount you’d like to spend or the number of dogecoins you’d like to purchase. Then press on the “buy” or “order” button and finalize your transaction.
But keep in mind that your broker or crypto exchange may charge trading fees for buying or selling cryptocurrency. You may see fees ranging from 0.05% to 5% per trade, according to financial services firm SoFi. However, some investing apps that offer crypto such as Robinhood and Webull offer commission-free crypto trades.
Consider a crypto wallet
For added security measures and flexibility, some crypto enthusiasts move their dogecoins into a crypto wallet outside one provided by the crypto exchange or brokerage platforms.
Crypto wallets are software or physical devices that contain the keys or passwords that give you access to your crypto currency balance on the blockchain, a digital ledger where your cryptocurrency actually lives. These keys also allow you to send, receive and spend cryptocurrencies like Dogecoin and Bitcoin – a feature absent from many of the crypto wallets provided by brokerages.
Crypto wallet manufacturers claim to offer higher levels of protection than exchanges or brokerages do. On the other hand, many crypto exchanges offer some kind of insurance to protect cryptocurrency holdings.
Crypto wallets come in two forms. Hot wallets are software connected to the internet. You create a password you use to access the digital wallet. For security, many hot wallets are encrypted and prompt two-factor authentication before you log in to your account.
Cold wallets or hardware wallets are physical devices where you store your crypto keys. Think of it as a flash drive that holds the keys to your cryptocurrency instead of files. The only way a thief could steal cryptocurrency from a cold storage wallet is by accessing the device itself as well as your pin number and seed or back-up phrase.
“The gold standard and safest way to store cryptocurrency is with a cold storage wallet” says Nicole DeCicco, founder of CryptoConsultz, a blockchain and digital currency consultancy.
There are plenty of crypto wallets competing for your coins out there. To make it easier to find the right crypto wallet, here is a list of the best crypto wallets.
How to Buy Dogecoin FAQ
What is Dogecoin?
Dogecoin is a cryptocurrency created in 2013 as a joke based on the popular meme of a Shiba Inu dog that speaks broken English.
Despite its quirky origins and an initial price of less than a penny, Dogecoin boasted a market capitalization of more than $19 billion in February 2022. Its popularity is fueled by backers such as Elon Musk, Mark Cuban and Snoop Dogg. It’s also amassed a dedicated following across social media platforms like Reddit and Twitter.
When did Dogecoin start?
Dogecoin was created in 2013 as a joke by software engineers Jackson Palmer and Billy Markus. Palmer in 2018 admitted creating Dogecoin was nothing more than a “hobby project.” Dogecoin Co-creator Billy Markus told CNBC in 2021 that he had wanted to create a “fun and lighthearted” crypto community as opposed to the “elitist” one that existed at the time.
Dogecoin vs Bitcoin
Bitcoin is the most popular cryptocurrency out there with a market capitalization of more than $730 billion, compared to Dogecoin’s more than $18 billion market cap.
Bitcoin and Dogecoin exist on a digital public ledger called a blockchain. Both are created on a proof-of-work basis. This means cryptocurrency creators called “miners'' compete with each other using powerful computers to solve complex mathematical codes that verify crypto transactions and earn themselves new coins.
Unlike with Bitcoin, there’s also no limit to how many dogecoins can be created. Bitcoin’s software ensures there will never be more than 21 million bitcoins in circulation. By contrast, as of January 2021, there were more than 130 billion dogecoins in circulation, according to CoinMarketCap, a cryptocurrency analysis platform. About 10,000 dogecoins are created every minute.
Where can I buy Dogecoin?
You can buy Dogecoin through a crypto exchange like Coinbase or an investment app such as Public, which allows you to trade Dogecoin and other cryptocurrencies.
How much is Dogecoin worth?
As of January 2022, Dogecoin is trading for about 17 cents. Its record high was about 74 cents, a peak seen in May 2021, shortly after Elon Musk tweeted that he will host SNL, prompting rumors that he would mention Dogecoin on the popular show.
Why is Dogecoin dropping?
Because Dogecoin isn’t backed by claims on any asset, it can be difficult to say what drives its price up or down. However, there are a few factors that appear to influence its price.
Dogecoin’s price tends to move in concert with other cryptocurrencies. That’s what happened in early 2022, when worries that the Federal Reserve would hike short-term interest rates sent cryptocurrencies tumbling across the board. In the span of roughly a month, Dogecoin’s price declined roughly 25%. The drop was similar to declines for Bitcoin and many other coins.
News and social media coverage can also drive Bitcoin’s price. For example, in early 2021, Dogecoin soared to a high of about 77 cents from about six pennies after Elon Musk– who often expresses his enthusiasm for Dogecoin on Twitter — announced that he will host SNL, setting off rumors that he would mention the alt-coin. However, when Musk ended up poking fun at Dogecoin instead, its price quickly plunged to less than 50 cents.
“Let’s be honest. It’s a media coin influenced by its hype,” says Saqib Iqbal, a crypto enthusiast and forex market analyst at FXStreet, a forex website.
How High will Dogecoin go?
Dogecoin reached a high of about 77 cents in May 2021, before dropping to about 14 cents by the end of the year.
Advocates say the coin could regain traction in 2022 and beyond as more companies begin accepting Dogecoin for goods and services, making it more of a feasible currency than just a speculative asset.
In January 2022, Dogecoin spiked by about 9% after Elon Musk announced Tesla would accept it as payment for some of its merchandise. AMC plans to accept Dogecoin as payment for online concessions and ticket purchases during the first quarter of 2022. Moreover, the Dogecoin community on Twitter has been encouraging McDondald’s to accept Dogecoin.