What Is Dogecoin?

It’s been a crazy year in the land of cryptocurrency—large upswings, more businesses accepting crypto to pay for everyday purchases, and oh yeah—the wacky world that is NFTs. And if this new thing called Dogecoin is any clue, things are only going to get more eye-catching.

Oh—what is Dogecoin? Grab your popcorn for this.

Think you’ve heard about every weird thing on the internet? Think again.

What Is Dogecoin?

Dogecoin (pronounced “dohj-coin”) is a type of cryptocurrency like Bitcoin, Litecoin, Ethereum and all of those. And even though it sounds like it’s currency for dogs, it turns out Dogecoin is like any regular cryptocurrency that can be bought and sold (like an investment) or used as currency (like real money). Except this one has a quirky little internet following . . .

What started as a joke back in 2013 is now the hottest thing to invest in. (Sure, that sounds about right). Back then, there was a meme going around of a Shiba Inu (that’s a kind of dog). The creators of Dogecoin named their cryptocurrency after the “Doge” meme, it became their mascot, and the rest is internet history. Oh, we’re dead serious. You can’t make this stuff up.

Bitcoin vs. Dogecoin: What’s the Difference? 

Both Bitcoin and Dogecoin are different types of cryptocurrency, but one is the alpha and one is the underdog in the world of crypto. Bitcoin is more of a household name—you’ve heard about it before, right? Dogecoin is like that runner at the Olympics who no one has ever heard of before, but they just swooped in and won the race. Now everyone wants to know who they are.

Why Is Everyone Talking About Dogecoin? 

So, how did a joke on the web go on to become “money” that shot up 500% in value in just 24 hours (back in January 2021)?¹ Pop culture—what else? The mascot for this “money” is a funny meme of a dog, after all. So what do we really expect?

But a dog meme (charming as it is) can only get you so far. If you really want to shoot for the stars, you have to hitch your wagon (or spaceship) to something that’s going places. Which brings us to Elon Musk.

The Tesla and SpaceX CEO tweeted a photo of a dog flying to the moon—which made Dogecoin’s value skyrocket. He’s also called Dogecoin one of his favorite cryptocurrencies. 

Then came the internet hype around #DogeDay on April 20. The idea? Get everyone to invest in Dogecoin and flood the market to drive up the price (GameStop, anyone?).

And it worked. For a while.

Dogecoin hit $0.4252, but by the next morning, it was down 22% at $0.3248.² It hit its highest peak of $0.68 in May but dropped right back down the next day.³ All that to say, a lot can change in one day—especially if your investors decide to get out while the gettin’ is good.

Since Dogecoin was at about $0.0026 this time last year, it’s fair to say it has come a long way.⁴ But seeing how Doge fanatics wanted to push Dogecoin “to the moon”—aka up past $1—their rocket ship went tumbling back down to earth.

How to Buy Dogecoin 

In case you’re wondering, we’re not suggesting you go out and invest in Dogecoin. We’re just not. But if you want to know how the heck someone even goes about buying this Dogecoin stuff to begin with, we’ll tell you.

Like with everything cryptocurrency, it’s pretty weird. So buckle up:

1. Set up an account on a cryptocurrency exchange.

There are plenty of crypto websites and apps out there that will let you buy Dogecoin. Once someone sets up an account and all their personal details are verified, they’re free to buy cryptocurrency (using real money).

2. Purchase cryptocurrency.

Okay, so before you can invest in crypto, you have to fund your account first. This means you have to use real money to buy fake money (crypto) on the internet. With us so far? 

3. Buy Dogecoin.

Once someone has bought crypto, they can use that to purchase shares or “coins” of cryptocurrency like Bitcoin, Ethereum or—you guessed it—Dogecoin.

4. Hold your breath.

This investing strategy? Woof. Dogecoin is all over the place. If someone does invest in it, they’d better be prepared for a wild ride, a lot of near misses and a big dose of anxiety. Spoiler alert: That’s another reason why we don’t recommend it. Who wants to live like that? Not us. That’s the opposite of financial peace right there.

Market chaos, inflation, your future—work with a pro to navigate this stuff.

You’re probably thinking, Wait—don’t people make insane amounts of money investing in risky things like Dogecoin? Yeah—they do. They make money gambling at the blackjack table, betting on racehorses, and picking which celebrity kicks the bucket next too. But those aren’t investment strategies. And neither is Dogecoin.

Should You Invest in Dogecoin?

So now that you know what Dogecoin is, should you invest your money in it?

Nope. Hard pass.

No matter what weird, trending investment fad pops up—our view doesn’t change. We aren’t swayed by all this “get rich quick” investing stuff, and you shouldn’t be either. In fact, we’re already seeing crypto crash in the market. The nature of investments like these are pretty simple—they’re hot-blooded, totally unpredictable and a huge risk. Aka—if you can’t afford to lose the money, don’t put it there.

See, investing is about the long haul. You want to put money in, let time do its thing, don’t touch it, and then reap the reward later on down the road (much later). With these high-risk investments like Dogecoin, there’s no room for that. It’s jump into the fire, jump out, and hope you didn’t get burned.

Yeah, thanks, but no thanks.

So, tell your college roommate to back off on trying to pressure you to invest in Dogecoin because it’s going “to the moon.” Instead, sit down with a trusted pro like one of our SmartVestors and let them walk you through this investing thing the right way.

This article provides general guidelines about investing topics. Your situation may be unique. To discuss a plan for your situation, connect with a SmartVestor Pro. Ramsey Solutions is a paid, non-client promoter of participating Pros.