Crypto is famous for its volatility, so anyone mulling over investing in the space should prepare for wild price swings. And while it’s true that digital assets have been gaining more widespread adoption, that volatility still remains the case.
Take, for instance, Elon Musk’s favorite and meme crypto king, Dogecoin (DOGE). Following Trump’s November election win, the coin nearly tripled in value in just over a month. Yet 3.5 months later, it has given back 60% of those gains to the market.
It should be noted that DOGE’s ascent coincided with Elon Musk being appointed by Trump to lead the newly established Department of Government Efficiency (DOGE, right?), an initiative aimed at reducing government waste and streamlining federal operations.
Following such a pullback, top investor Adam Spatacco, who’s ranked in the top 1% of TipRanks’ stock pros, has been wondering if now it might be a good opportunity to scoop up shares at a bargain.
Well, in short, it won’t. “My thinking is that some investors bought into a narrative that DOGE and Dogecoin might be related somehow,” Spatacco sensibly says.
So, following a brief post-election surge of excitement, Spatacco thinks investors soon came to the realization that Musk’s government role had no connection to Dogecoin – triggering a wave of selling.
Spatacco also points out that when it comes down to it, Dogecoin “does not have much utility in the real world.” Bitcoin, on the other hand, is seen as a form of digital gold, something more and more institutions and businesses appear to be cottoning on to. And that gives it inherent value.
In contrast, Dogecoin’s price movements are often driven by hype and speculative narratives that link unrelated events. Essentially, investing in it resembles a “meme-style opportunity.” For this reason, says the 5-star investor, “it’s almost impossible to identify a definitive, concrete catalyst that could drive a rebound in its price.”
Meanwhile, Spatacco expects the wild price swings will continue and concludes that investors should be wary of wading in here.
“Ultimately,” he sums up, “I think it will continue to fall as more investors catch on that its value in the crypto realm pales in comparison to more mainstream opportunities. I would avoid chasing any momentum in Dogecoin — the risk of being left a bag holder is simply just too high.” (To watch Spatacco’s track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.