As Dogecoin is skyrocket for a week, the financial market is predicting a big crash of Dogecoin but at the same time due to its high demand and popularity, many companies started accepting Dogecoin as a payment method so is it going to be more valuable than a USD?
The Dogefather— Elon Musk (@elonmusk) April 28, 2021
SNL May 8
Dogecoin rally started off with a tweet by the billionaire tycoon Elon Musk, indicating that he would mention Dogecoin while hosting SNL in May, which let netizens made assume that the price of the coin could possibly hit its new high 1$.
Crypto markets are highly volatile and most crypto experts agree that Dogecoin is not a good long-term investment option due to a number of reasons. Doge is an inflationary coin, meaning it has an endless supply that keeps growing more so if the demand can’t balance its supply, the coin can crash.
Every year, more than 4 Billion Dogecoin are mined and added to the overall supply. In the long term, this makes Doge unstable for long-term investment, unlike Bitcoin, which has a high demand and a limited supply.
Since the popularity of Dogecoin started increasing, many companies started accepting Dogecoin as a payment method but the current demand for the coin is not enough to declare it more valuable than USD but in the coming days we expect many large companies to accept Dogecoin as a payment method.
The Coin has already given a return of 13000% in the year 2021 which is way higher than most of the popular cryptocurrencies in the market.
Cryptocurrency is promising, but please invest with caution! https://t.co/A4kplcP8Vq— Elon Musk (@elonmusk) May 7, 2021
The numbers could be promising but the high reward comes with high risk, which was also mentioned by Elon Musk itself in an interview where he claims the ‘meme coin’ to be the future of the cryptocurrency. The crypto market is highly unpredictable unlike the stock market where each company as a fundamental to analyze to predict an estimation but in the crypto market, the only fundamentals which are being followed are supply-demand and lastly is the business model for which the coin is created
Guest starring … pic.twitter.com/buM3bTOWbX— Elon Musk (@elonmusk) May 7, 2021
Right now, the coin is in high demand due as netizens are waiting for the tech magnate, Elon Musk to talk about the coin on SNL, but as per Yahoo Finance, 90 percent of Dogecoin is controlled by 100 wallets so if these holders decide to sell off their holdings there will be a major crash of Dogecoin. The probability of a market crash is really low as of now until Musk’s appearance on the snow is telecasted but we could expect a market crash soon after the show ends because many holders would book their profit and exit their position.