So, Dogecoin Now?
Bitcoin is surging … so too is Dogecoin … differentiating between quality and not-so-quality altcoins … the latest developments in the altcoin sector
Bitcoin has climbed more than 21% over the last two days.
Yesterday, we learned that the eccentric billionaire’s company, Tesla, has purchased $1.5 billion worth of bitcoin. Plus, it will begin accepting bitcoin as payment for its products.
Given the headlines, investors are stampeding into the crypto. As I write Tuesday morning, it’s trading at nearly $47,000.
***While this news received most of the headlines, there’s another Elon Musk story that has impacted the crypto world in the last two days
On Sunday, the altcoin, Dogecoin, leapt to become the eighth-most valuable cryptocurrency in the world after Musk tweeted, “Who let the Doge out?”
In response, the altcoin soared 53% in a 24-hour period, reaching 8.2 cents.
Just a week ago, it was trading at 2.5 cents. As I write, it’s trading at 7.9 cents.
“Who let the Doge out” is just one of Musk’s Dogecoin-focused tweets in recent days. Here are some screenshots of others …
The one below is my personal favorite.
It includes two other recent Doge-bulls, Gene Simmons of the rock band KISS, and rapper, Snoop Dogg.
You’re seeing a play on the Disney movie, The Lion King. In the movie, the character Rafiki, the shaman baboon, holds up young Simba, son of the lion king, for all the animal kingdom to see.
In effect, it’s a blessing — a bit like saying “here is the chosen one.”
Below, we see Musk, Gene Simmons, and Snoop Dogg, all holding up a dog, in effect “blessing” Dogecoin.
(Yes, the name “Dogecoin” comes from the word, “dog.” More on that in a moment.)
Here’s the full photo …
***So, what exactly is Dogecoin?
It’s an altcoin that was launched nearly a decade ago as a joke. At that time, new altcoins were popping up all over the place. Dogecoin was a gag, mocking the explosion of “me too” altcoins that didn’t provide any real value.
From The Wall Street Journal (WSJ):
Dogecoin, which has become a favorite topic on Reddit’s WallStreetBets forum, got its start in 2012 under a different name, according to its founder, software developer Billy Markus.
He was watching bitcoin and decided he wanted to make his own light-hearted cryptocurrency based on the video game “Animal Crossing,” which he called Bells. When he released it online, people hated it, he said.
When another developer, Jackson Palmer, shared his idea for a cryptocurrency based off of the Shiba Inu dog meme, Mr. Markus called it “the greatest idea ever,” and reconfigured his code for Bells to fit the meme. He set out to create a coin so ridiculous it could never be taken seriously.
Fast-forward nine years, and Dogecoin is being taken seriously.
Interestingly, no one is more baffled by this than the founder himself.
Back to the WSJ:
“The idea of Dogecoin being worth 8 cents is the same as GameStop being worth $325: It doesn’t make sense. It’s super absurd,” Mr. Markus said. “The coin design was absurd and it was meant to be absurd.”
Now, who knows? Dogecoin might go on a massive, social-media-fueled run like we just saw with GameStop. So, if you want to gamble on it and it works out, great.
But Dogecoin is not what we refer to in the Digest when we write, “elite altcoins.”
There’s a huge difference between an altcoin that could soar based on a push from well-known public figures, and an altcoin that provides real benefit, and can soar based on its intrinsic value.
***Investors must have a deliberate, well-informed system for distinguishing between altcoins
To illustrate one such system, we’ll borrow from our altcoin specialist, Matt McCall, editor of Ultimate Crypto. He utilizes his proprietary “MAG System.”
The MAG System is a 10-point investment protocol that weights various crypto criteria to arrive at a composite score, indicating whether any particular altcoin is a “buy” or not.
The system analyzes everything from the size of the potential market for particular crypto … to the strength of the team behind it … to risk … and more.
As evidence of how well it sifts the good from the not-so-good altcoins, I’ll add that the average return in Matt’s Ultimate Crypto portfolio — launched one year ago in January — is now 437%.
For further context, the portfolio holds 13 coins. There are no losses. Every coin, except two, is up at least 100%. Six are up more than 300%. Two are up more than 1,000%.
As just noted, behind these gains are altcoins that offer real value — they’re solving actual problems. They’re not mindless gambles, based purely on the greater fool theory.
To illustrate this problem-solving trait of certain altcoins, let’s turn to Matt’s Saturday issue of Moneywire:
There’s a special situation rapidly unfolding in the crypto markets right now, and it relates to the crazy trading we’ve seen in the stock market.
It’s called decentralized finance, or “DeFi” for short.
DeFi is a global movement toward an open financial system. I’m talking savings, loans, insurance, trading, betting, and more … all accessible in one place to anyone with an internet connection …
I like to think of DeFi as a high-tech vending machine.
With just a single click of your finger, you’ll be able to take out a loan or mortgage … buy a new insurance policy … make money loaning out your money … invest in stocks, bonds, or any other asset class … deposit your cash into a safe savings account.
You’ll do all of this in one place — right from your phone or computer — without dealing with middlemen and their unnecessary fees and sometimes prohibitive requirements.
As an example, Matt points toward a DeFi altcoin called Compound.
He tells his readers that Compound is revolutionizing the way we borrow and lend money. The coin allows you to lend out crypto and earn interest in return. You can even use Compound to take out a loan — without using a bank or middleman.
Think about how much money consumers would save by eliminating middlemen — in this case, say, a loan officer, who might be skimming percentages of loan values. Consider all the middlemen around the world, sucking money out of transactions, like mosquitoes on an arm.
Compound’s technology — which results in real dollars being saved — offers intrinsic value. That’s why its price is up nearly 700% over the past year …
Back to Matt:
Aave is another altcoin in the DeFi space. It’s similar to Compound in that it helps people earn interest on their assets and take out loans.
Aave grew 24,532% in just over one year. That’s equivalent to a 250X gain!
And that isn’t even a coin I recommend currently.
DeFi is the biggest revolution to occur in finance in centuries, and we’ve just seen how we need it more than ever. InternationalBanker.com calls it “a major breakthrough in the world of financial services.”
And as a result, it can unleash a new, powerful wealth-creation force.
If you’re interested in DeFi coins, here are the top five largest by market cap, according to CoinMarkCap.com …
In reading this, you’re on the cutting-edge of the crypto world, ahead of probably 95% of global investors. Putting your money to work now — before the other 95% knows what’s going on — is how you grow your wealth many times over.
It’s a simple formula …
Use whatever system you’ve chosen to identify the most valuable altcoins … invest a reasonable amount relative to your specific financial situation … be patient as the broader investment world catches up.
It happened with Aave, climbing nearly 25X in just over one year. There will be other, similar success stories.
Wrapping up, we’ll keep watching the Doge situation with interest, but if you’re serious about the world of altcoins, top-tier DeFi coins, like the ones in Matt’s portfolio, are a better bet for your wealth.
Have a good evening,
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.