I bought $1k worth of Dogecoin and then realized I fucked up (but also got lucky)
Four days ago I diversified my crypto portfolio, betting that pretty much every shit coin is going to ride ridiculous waves over the next year and I could stand to make more money jumping in and out of 20 different coins than by putting all my eggs in one basket.
I knew it didn't make mathematical sense to buy Dogecoin, but I figured stupid people (like me) would keep buying it and boost the price. While I was holding 100,000 Dogecoins, the price did indeed go up, and it still is.
But a tiny thought kept nagging at me. The Dogecoin blockchain will never stop producing tokens, and it produces a lot. So there's no scarcity to give it's price a solid foundation, and massive inflation will constantly devalue it. So the only way Dogecoin will ever break out, is either for a massive amount of people to buy a ton a tokens, and even then, inflation will bring that price down eventually... or for Dogecoin to stop producing new tokens, which its creator said he won't do.
The more I thought about it, the more I faced the fact that I could make more money quicker by holding just about any other coin. So I traded half my Dogecoin for Cardano (ADA), which is still a gamble, but it's better than Dogecoin.
Over the next 24 hours, the rational side of my brain kept screaming that Dogecoin's price is unsustainable by design, but the psychologist in me kept saying, "People like Dogecoin, and if Donald Trump can become president of the United States, anything can happen. In an unpredictable world, bet on the unpredictable happening. Just hold on to 10-50 thousand tokens." To prove to myself Dogecoin would hold some value until the mystery event happened that would give it real value, I took another look at its full historical price chart... and immediately traded all my Dogecoin for Ripple.
Look at how much Dogecoin has increased in value over the past two months. That's not proof of value. That's a goddamned bubble about to burst. Dogecoin is still going up, but there's no reason for that trend to continue. Plus, nobody is talking about Dogecoin, and viral chatter is what makes prices go viral. Right now, all the chatter is about Ripple. If you're going to base your purchases on predicting crowd behavior, all signs point there.
Granted, I did make about $160 holding my Dogecoin for four days, but I'll sleep much better tonight knowing I won't be holding onto it when the market corrects itself. Even when Dogecoin hits rock bottom again, I won't buy back in unless I hear some big news about it. Why wait for Dogecoin to inch its way up fractions of a penny when you could make more on Bitcoin or Etherium's normal behavior?
Why do people like Doge? I see even the Doge founder is bewildered. It's not like they have done anything new recently. It seems investors are jumping around the various coins at random lately.
Good link. People like Doge because they look at the cheap price and see high growth potential... which they wouldn't see if they looked at the foundation of the coin.
it astounding to see why anyone would want to put money into a coin that provides no value proposition.
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