Dogecoin jumps after Mark Cuban feedback. What to know concerning the rally
A view of dogecoin commemorative coins, Yichang, central China’s Hubei province, May 9, 2021.
Costfoto/Barcroft Media via Getty Images
Dogecoin, the cryptocurrency named after a meme of a shiba inu dog, is rallying again.
The digital coin jumped as much as 10% on Monday to more than 35 cents, according to data from Coin Metrics.
The latest price action for dogecoin has been spurred by two of its highest-profile supporters. On Friday, Dallas Mavericks team owner Mark Cuban told CNBC Make It that he thinks dogecoin is the strongest cryptocurrency when it comes to making actual purchases. In March, the team became the first in the NBA to accept dogecoin for ticket and merchandise sales.
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Then, on Saturday, Tesla and SpaceX CEO Elon Musk tweeted that he agreed with Cuban about the nature of the coin.
The rally pushed the coin’s market cap to nearly $44 billion, putting it solidly in the top 10 cryptocurrencies, alongside bitcoin, ethereum, binance coin and tether, according to CoinMarketCap. In the last seven days, dogecoin has rallied more than 40%.
Still, the cryptocurrency is far from its all-time high of about 73 cents per coin, reached in May.
Even amid the comeback rally, experts caution investors not to jump into dogecoin just to make money. Cryptocurrencies are highly volatile, meaning that the current streak could reverse at any point.
Only invest what you’re willing to lose
Financial experts generally advise that people looking to invest in cryptocurrencies allocate just a small amount of their portfolio to the asset. The U.K.’s Financial Conduct Authority has issued a similar warning.
“Never invest anything you aren’t willing to lose,” said Ben Weiss, co-founder and CEO of CoinFlip, one of the largest bitcoin ATM companies in the U.S.
“If you like dogecoin and think it could be a viable currency in the future, or are fans of the idea and the movement, go ahead and invest in it,” he said. “If you don’t like it or think it’s a fad, don’t invest in it.”
He also cautioned first-time cryptocurrency buyers against diving right into dogecoin without having invested in any other coins. Bitcoin has a 10-year track record at this point, which puts it at a different risk level than investing in a newer alternative coin.
And, investors shouldn’t get into dogecoin just to turn a profit in a short time.
“If any part of your brain goes, ‘This is a great way to make a quick buck,’ that’s when you should think twice,” he said.
Buy for the long-term
Of course, Weiss is a supporter of investing in cryptocurrencies and dogecoin, and he recommends that all investors hold some digital coins, even if it’s just a small slice of their portfolio.
“You never want to totally miss out,” he said. “You always kick yourself more for the things you don’t do and the opportunities you miss.”
Those who want to invest in different digital coins should assess where they stand with other personal finance and investing goals to determine if they have some extra money to put into a risky asset.
Never invest anything you aren’t willing to lose.
CEO and co-founder of CoinFlip