Dear Dogecoin crypto holders, if you're holding Dogecoin or you're thinking about buying Dogecoin, this is something you will really want to read, because I've held Dogecoin before. I've seen all the hype, and I want to share some constructive feedback I have about Dogecoin right now that I think is important for you to hear. Keep in mind, I'm not a financial advisor, and this is not financial advice. I also hold tens of thousands of Internet Computer Protocol right now, so that clearly colors my position.
You might ask, well, why did you hold Dogecoin before and why don't you hold it now? I've reviewed thousands of cryptos, and I do at least one crypto review every single day. I care about you as a crypto investor. I want you to be successful with your investing, to both invest to make a better world and to invest so that you become wealthy. Everything I'm saying here you can look up and verify yourself, and I'd encourage you to do exactly that.
The Reality Behind the Narrative
So let's look at the reality of Dogecoin today versus some of the narratives. There's obviously the narrative that Elon Musk has pumped Dogecoin and made Doge what it is. But where do we go from here? The reality, in my view, is that Dogecoin is a copy of a copy. Dogecoin was copied from Litecoin, and Litecoin is a fork of Bitcoin. So there's no fundamental innovation that I can see on the part of Dogecoin, which means there's almost no long-term use case for it. And it was started as a joke.
This is one of the top meme coins today, if not the top one. But in my experience, all the money in meme coins is generally made in the small meme coins before they pump, and you have to dump before they dump. To me, there's no future in a large market cap meme coin that literally requires someone like the richest man in the world to pump it in order to get any serious upward action.
No Staking, No Roadmap, No Utility
There's no staking mechanism that I'm aware of, which means if you're holding it, you're just holding it, hoping the price goes up. That doesn't seem like a very good investing strategy to me. On top of that, you've got all these new meme coins coming up that tend to carry all the hype and excitement, whereas I don't see any clear vision for where Dogecoin is going. There's no roadmap. There's no long-term utility plan.
This means that, from what I see, other cryptos like Internet Computer that have the best technology in crypto, along with other cryptos that have the largest communities, a clear roadmap, and very clear use cases, are going to keep taking more and more of the market away from Dogecoin over time. There's also hardly any development happening on the protocol itself, and hardly any building on things like the GitHub. There are no smart contracts, so you can't even do DeFi or NFTs.
In fact, the best outlook for Dogecoin at this point seems to be to build a Layer 2 with Internet Computer Protocol, because then you could bring the technology fully on-chain and give Dogecoin a bit more utility. I tried a Dogecoin Layer 2 before, which was horrible, and it was mostly hosted off-chain anyway. When you look at it, the best possibility you have is to get some adoption from a Layer 2 on something like Internet Computer Protocol. I personally don't see why I'd want to hold Dogecoin instead of Internet Computer Protocol.
The Problem With Infinite Supply
There's also an infinite supply. For something like Internet Computer Protocol that's not a problem, because it has theoretically infinite scalability to build out the whole tech stack of the Internet. But Dogecoin has an infinite supply with no comparable utility behind it. So where are we going from here? Why would you even do anything with a token, or even hold it, when there's more and more of it being created? There's no incentive for a developer to try and do anything with Dogecoin.
You're also in the middle of something that's been heavily influenced by celebrities. To me, you're already in a scenario where this is about as good as it gets. The market cap also seems grossly inflated, because you have some of these old Bitcoin wallets that theoretically could still pull out some of their transactions for Dogecoin and dump that at any time. There's a lot of Dogecoin that, because it's a fork of Litecoin and a fork of Bitcoin, just sits there and doesn't do anything, which makes people think it's bigger than it actually is. It's artificially higher in market cap than the actual transactable supply.
Now, some people would argue that creates scarcity, but scarcity is based on demand versus supply. And almost everybody, from what I can see, is just holding Dogecoin on centralized exchanges anyway, which means those exchanges, if they're not honest, have the ability to sell fake Dogecoin too, which could be absolutely devastating for the price. There's also a small number of wallets that hold a significant portion of all the Dogecoin. So I don't see why, as a regular retail investor, this is something I'd even want to get into. You can't clearly see any great scaling for this in the future either, and the mining resources also appear to be shared with Litecoin.
Where Is the Opportunity?
There are so many potential problems here. But what I don't see is the opportunity. How many times can you count on Elon Musk to push Dogecoin from here? Isn't he burnt out on this himself? Is there any other hype that will ever come from Dogecoin, and if so, how much is it even going to go up? Will it even make up for all the dumping that happens in between? I just see no reason to hold Dogecoin, and that's why I dumped my Dogecoin in 2023.
I don't see why I would hold this compared to Internet Computer, or compared to lots of other investments like a house. To me, this seems very high risk with very low reward potential. Again, this is not financial advice. This is just my opinion, and I wouldn't take any action right after reading this. Just think about what I've said and digest it. Ideally take at least a day, if not more, to think things over before you impulsively transact anything.
The only reason I see people generally holding Dogecoin today is confirmation bias. You bought it before, and you don't want to sell it, because selling means facing the possibility that maybe you didn't make such a good decision buying it in the first place. You don't want to sell at a loss. But to me, I'd rather sell something at a loss and get into something with more opportunity than just sit there trying not to be wrong. Again, this is not financial advice, just my experience. My whole portfolio is in ICP today, and you can find much more of my thinking on investing in my Money playlist. I hope this helps some people holding Dogecoin to at least wake up and reconsider the position.