If you are forced to buy crypto, go for the famous Dogecoin

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After jumping more than enough sharks to fill every aquarium in the world, I’m no longer on The Walking Dead TV show. However, a once-memorable scene involving a set of protagonists in the program reminded me of Dogecoin (CCC: DOGE-USD), the adorable but controversial dog-inspired cryptocurrency meme.

Concept art for Dogecoin (DOGE).

Source: Shutterstock

As a group of biker gang members demanded that the on-screen heroes surrender their guns, the Chief turned to one of the stubbornly reluctant characters with a classic line (albeit altered for the language ): “If you have to eat [brown stuff], better not to snack. Bite, chew, swallow, repeat. It goes faster. “

It certainly is, not that I know from personal experience, but the man seemed to make a lot of sense. And logic is what you should apply when dealing with the seemingly irrational Dogecoin.

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As you may know from my previous positions on InvestorPlace and other publications, I haven’t been too kind to the same corner. Yet as the enthusiasm for benchmark cryptos continued to rise to insane valuations, I began to understand why Dogecoin is getting the adoration it gets. On the one hand, it’s unpretentious and it could go a long way.

Too often I see blockchain being offered as the answer to many of our social ills, like cancer. No, seriously, more than one person has argued that blockchain can cure this dreaded disease.

To be fair, I don’t think anyone is suggesting that a decentralized distributed ledger can literally cure cancer. On the contrary, through a steadfast, transparent and trustless system, global communities as a whole can promote effective funding for cancer research. Additionally, blockchain can facilitate a financial incentive for pharmaceutical companies to cure the disease rather than manage it.

For the most part, you’re not going to find grandiose statements like the ones above for Dogecoin – and thank goodness for that!

The story continues

Dogecoin and the big fool

What we have with this most popular coin is perhaps a perfect manifestation of the Biggest Fool theory. Fundamental? There are no fundamentals, unless you consider a joke-based crypto to be functionally relevant to Dogecoin.

And in some ways, there is no technique. Of course, technical analysis is probably the best way to approach Dogecoin. But if you look at a long-term chart of DOGE (on a logarithmic scale so you can see the moves based on the smaller denominations), many swings back and forth seem wild and random.

Ultimately, you hope that if you buy Dogecoin today, someone else will buy it at a higher price tomorrow. In the end, is this such a bad idea?

Here’s why I’m bringing up the TWD quote. By Jamie Dimon of JPMorgan Chase (NYSE: JPM) Renowned – or infamy depending on your point of view – Bitcoin (CCC: BTC-USD) is fundamentally worthless. Although he’s been a staunch supporter of cryptos for all these years, it’s hard to disagree, at least to some extent. After all, Bitcoin is not tied to a productive business. It does not employ people and does not generate income and dividends.

Therefore, if you find yourself in an apocalyptic scenario where biker gangs force you to buy a crypto of your choice, you might as well go for Dogecoin.

As Bitcoin supporters chat all day about the underlying blockchain technology, the reality is that this platform is not proprietary. Of course, specific blockchain protocols can be, but the concept of decentralized distributed ledgers is not. Therefore, anyone can create their own blockchain network – and many do.

Therefore, rather than munching on Bitcoin (because at $ 60,000 all most people can do is munch on), why not grab huge bites of Dogecoin? With nothing to support any coin except the belief that it may rise further, the relative risk-reward profile could favor DOGE.

A dangerous way to live

Another factor that supports the meme is the Dogecoin community. I can’t say for sure what his main motivation is. But as I mentioned, it lacks pretension. And it could be very appealing to young investors, who seek authenticity in their buying decisions.

What could be more authentic than a crypto project whose sole purpose is to make money for its stakeholders?

However, I do not want to deceive any investor. Dogecoin is incredibly risky. The only reason I own some units is because I probably bought them as a joke (actually, I can’t remember the real reason). This is a mistake that went very well, but usually such mistakes end in tears.

But the point is, you can suffer bigger tears over Bitcoin. Therefore, a smaller nominal bet in Dogecoin makes sense due to its higher percentage based reward profile i.e. if you were going to invest in cryptos anyway.

As of the date of publication, Josh Enomoto held a LONG position in DOGE and BTC. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.

Former senior business analyst for Sony Electronics, Josh Enomoto has helped negotiate major contracts with Fortune Global 500 companies. Over the past few years, he has provided unique and essential insight for the investment markets, as well as various other sectors, including law, construction management and health.

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