Dogecoin is not a stock; it is a cryptocurrency. Novice traders mistakenly believe Dogecoin is a stock because it trades on an exchange and has a ticker symbol: DOGE.
Dogecoin is a cryptocurrency, a heavily encrypted digital currency built in the blockchain. Many people consider blockchain far more secure than the regular internet.
Some people think cryptocurrencies, such as Bitcoin (BTC), Binance (BNB), and Ethereum (ETH), are the future of money. There are communities of enthusiasts and platforms that accept Bitcoin and Ethereum.
Most people do not accept cryptocurrencies as money because they are not government-backed. Moreover, few buyers accept Dogecoin payment because it is not a major cryptocurrency, such as Bitcoin.
Many people use cryptocurrencies, such as Bitcoin (BTC), as an investment. There is a large market in cryptocurrencies and many cryptocurrency exchanges.
What is Dogecoin?
Dogecoin (DOGE) was the first meme coin. A meme coin is a cryptocurrency created as a joke.
Software engineers Billy Markus and Jackson Palmer built Dogecoin to mock cryptocurrency speculation in 2013. The name Dogecoin is part of the joke; the term Doge is a play on the word dog. Each Dogecoin has a picture of a Shiba Inu dog on it.
Cryptocurrency investors, however, did not get the joke. Many investors and speculators treat Dogecoin as a real cryptocurrency. Dogecoin trades on major cryptocurrency exchanges, and many websites track its value. Dogecoin had a $1.248 billion market capitalization on May 18, 2022. However, Dogecoin had a Coin Price of 8.535₵ on the same day.
Should You Buy Dogecoin?
You should not buy Dogecoin because Dogecoin has no inherent value, and it has lost 80% of its value since June 2021. Cryptocurrencies are an extremely risky investment, and most cryptocurrency traders have lost significant amounts of their invested capital.
Elon Musk and Dogecoin
Dogecoin became famous when Elon Musk began promoting it. It is not clear if Musk is serious about Dogecoin or if he was pulling a joke on investors and television viewers by promoting it.
Musk even mocked Dogecoin in a skit on the popular American comedy show Saturday Night Live on May 8, 2021. In the Saturday Night Live skit, Musk’s character calls Dogecoin a “hustle.” A hustle is a slang term for a scam or fraud.
How Much is a Stock in Dogecoin?
Dogecoin is not a stock because it does not convey ownership in a company. Instead, the only value Dogecoin offers is the value of the coin.
Dogecoin does not contain any stock because it is not a synthetic asset. A synthetic asset, such as a stablecoin, gives access to a real-world asset such as a stock, a fiat currency, or a commodity. For example, the Tether (USDT) stablecoin lets users make US-dollar payments. Similarly, Tether Gold (XAUt) conveys ownership of a troy ounce of pure gold.
Since it is not a synthetic asset, Dogecoin is nothing but a digital coin. Dogecoin’s only value is the coin price Mr. Market pays for it.
Unlike a decentralized autonomous organization (DAO), or a stock, Dogecoin does not offer voting rights. American stockholders get the right to vote for the company’s board of directors.
A class of cryptocurrencies known as decentralized autonomous organizations (DAOs) gives digital asset owners a similar right. Dogecoin is not a DAO.
Is Dogecoin a Penny Stock?
Dogecoin is not a penny stock because it conveys no corporate ownership. Thus, neither Over-the-Counter-Bulletin Board (OTCBB) nor the Pink Sheets track Dogecoin. The OTCBB and the Pink Penny Sheets are tracking services for US stocks that do not trade on major exchanges such as the NYSE.
Since it is not a stock, the US Securities and Exchange Commission (SEC) does not regulate Dogecoin. That means the only financial numbers available for Dogecoin are market data. There are no earnings reports or prospectuses to show if the asset is making money.
However, many regulatory bodies, including the SEC, monitor Dogecoin. Authorities will take legal action if they think there are fraud or securities law violations involving Dogecoin.
Dogecoin (DOGE) shows the dangers of cryptocurrencies and other digital assets. Dogecoin is an unregulated digital asset with no value beyond the market price. Smart investors will avoid joke or meme coins, such as Dogecoin.
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