According to A Popular Crypto Analyst There Is a Shitcoin About to Pump up to 150٪.
Dogecoin, a cryptocurrency launched in 2013 as a parody of Bitcoin, has experienced significant price fluctuations over the past three years. At the beginning of 2021, Dogecoin was worth only $0.01, but it later surged to a record high of $0.73 on May 8, 2021.
Summary:
- A popular crypto analyst, Altcoin Sherpa, believes Dogecoin could surge 150% to $0.40, calling it a “safe” bet.
- This prediction is based on factors like renewed investor interest, low downside risk, and potential influence from Elon Musk.
- However, Dogecoin also faces challenges like limited utility and regulatory skepticism, making investors cautious despite its potential for short-term gains.
This dramatic rally was driven by two main factors. Firstly, a combination of social media hype, low interest rates, and government stimulus checks sparked a buying frenzy in cryptocurrencies, meme stocks, and other speculative investments in 2021. Secondly, the endorsement and promotion of Dogecoin by prominent figures, such as Elon Musk, Mark Cuban, and Snoop Dogg, contributed to its meteoric rise.
However, the current value of Dogecoin is around $0.16, as soaring interest rates have driven investors away from speculative assets like cryptocurrencies. The broader cryptocurrency market has also experienced a new “crypto winter,” with many smaller altcoins collapsing.
Faced with these challenges, some investors may be inclined to focus on “blue chip” cryptocurrencies like Bitcoin and Ether. Nevertheless, a prominent crypto analyst, known as Altcoin Sherpa, has recently claimed that buying Dogecoin and expecting it to rally by about 150% to $0.40 could be one of the “safest trades” for investors at the moment. It remains to be seen whether this outlook will prove accurate and if Dogecoin can make a comeback in the near future.
The Bullish Case for Dogecoin
According to Altcoin Sherpa, a prominent crypto analyst, there are several factors that support a bullish outlook for Dogecoin:
- Retail investor appeal: Altcoin Sherpa believes that retail investors will buy Dogecoin again, driving up its price.
- Liquidity and low downside: Dogecoin is seen as having great liquidity and low downside risk compared to other meme-based cryptocurrencies.
- More appealing than smaller altcoins: Altcoin Sherpa suggests that Dogecoin may be more appealing to investors than many of the smaller altcoins in the market.
- Elon Musk’s influence: The analyst believes that a single tweet from Elon Musk could significantly boost Dogecoin’s price, as Musk’s past comments and actions related to the meme coin have historically driven up its value. This includes Tesla’s acceptance of Dogecoin as a payment method and Twitter’s (now X) temporary adoption of a Shiba Inu logo, which both positively impacted Dogecoin’s price.
Overall, Altcoin Sherpa’s bullish case for Dogecoin is based on the coin’s potential to attract renewed retail investor interest, its perceived liquidity and limited downside risk, and the possibility of Elon Musk’s continued influence on its price.
The Problem with Dogecoin
While Dogecoin may be more stable than smaller altcoins, it lacks the long-term catalysts of more established cryptocurrencies like Bitcoin and Ethereum. Despite being accepted as a payment method by some businesses, Dogecoin’s volatile price still makes it more of a publicity stunt than a realistic payment option for most customers.
Regulators also appear to be less impressed with Dogecoin. In September last year, the New York State Department of Financial Services excluded Dogecoin from its “green list” of regulated cryptocurrencies, which includes Bitcoin, Ethereum, and six stablecoins. This suggests that Dogecoin is still considered a highly speculative investment.
Furthermore, Dogecoin’s blockchain platform cannot be natively used for developing decentralized applications. This is because it was forked from Bitcoin’s blockchain, which does not support app development, and uses the energy-intensive proof-of-work (PoW) mining method. In contrast, other blockchain platforms like Ethereum, Solana, and Cardano utilize the more energy-efficient proof-of-stake (PoS) method, which has been widely adopted for building decentralized applications and supporting smaller tokens.
While Dogecoin’s backers have launched Dogechain, a separate blockchain network to support Dogecoin-based apps, it has not gained the same level of adoption as other decentralized platforms.
Crypto Traders Should Be Skeptical
There are also indications that investors are losing interest in Elon Musk’s views on Dogecoin. In April, when Musk randomly tweeted about the coin’s growing popularity, its price barely moved, countering the analyst’s belief that a single bullish tweet from Musk could significantly boost the coin’s value.
Given these factors, investors should be cautious about Dogecoin’s future potential. While it may be more stable than smaller altcoins, it lacks the long-term catalysts and regulatory support of more established cryptocurrencies. Investors should perform their own due diligence and be prepared for the possibility of significant price volatility, rather than blindly following the opinions of popular crypto analysts with large social media followings.
Source: fool