Dogecoin is a crypto coin that started off as a joke with the iconic Shiba Inu dog as its logo. For those who have invested in this great altcoin, the question is, “Should I Sell Dogecoin?”
While Bitcoin and Ethereum have traditionally been the “go-to” crypto coins to invest in, 2021 saw many investors diversifying their portfolios with up-and-coming altcoins that hold the promise of potentially lucrative rewards.
Since the start of the pandemic, cryptocurrencies have enjoyed exponential gains as an increasing number of investors have explored digital assets. Not only are cryptocurrencies a quicker and cheaper way to transact abroad and shop online, but they are also perfect when playing at the top cryptocurrency casino or buying the latest NFTs on offer.
Dogecoin’s Recent Performance
The value of Dogecoin ambled along under $0.01 at the beginning of 2021 and increased to $0.40 by April 2021. The good times continued to roll for investors as Dogecoin hit record highs of $0.68 in May 2021 — astonishing!
Since reaching those heights, however, Dogecoin appeared to have a digital nosebleed and steadily came down to earth with lows of $0.19 towards the tail-end of June 2021 — leaving investors worse for wear. That price has remained relatively stable since, with Dogecoin’s value sitting steadily at around $0.16 on average over the past 6 months.
This is great news for those long-term investors who bought Dogecoin under $0.01 at the beginning of 2021 and enjoyed incredible gains of 15 times more at the beginning of 2022. While that profit margin is truly impressive over the space of 12 months, things were not all rosy for Dogecoin’s investors and many would have questioned whether to sell their DOGE or HODL?
What Is HODL and How Does It Affect Your Dogecoin?
HODL is a term used amongst crypto investors and means Hold On for Dear Life — or holding onto a cryptocurrency instead of making irrational decisions and selling it.
Considering the volatile nature of cryptocurrencies, as evidenced by Dogecoin’s mid-year performance, seasoned investors choose to HODL in times of uncertainty. They then ride out the storm until the market stabilizes. For long-term Dogecoin investors that chose to HODL, their choice was vindicated, as the price of Dogecoin enjoyed substantial growth in the past 12 months.
Seasoned crypto investors are typically HODLers who remain steadfast and confident in the long-term value of Dogecoin and don’t make impulsive decisions at the first sign of volatility. HODLers strategy is to buy and hold crypto, like Dogecoin, for as long as possible, irrespective of how the market swings.
Should You HODL Your Dogecoin?
With Dogecoin’s remarkable market activity in 2021, investors keep asking “should I sell Dogecoin or HODL?”
If last year is anything to go by, investors have more confidence in the resilience of Dogecoin and its potential to grow to greater heights. There is always the hope that you are buying DOGE with the intention to hold on to it for the medium term, at least.
Considering the fluctuations of the crypto market, it appears counter-productive to buy and sell your DOGE at the first sign of volatility. Looking back to last year, HODLing for long-term profits seems to be a smart strategy and a profitable one for those investors who clung to their DOGE through the turbulence.
HODLing is not for the faint-hearted. You need to have a lot of self-control and focus to pull it off. In such a fast-paced world that we live in, HODLing acts as a preventative measure against the Fear of Missing Out (FOMO) that so many people succumb to. While HODLing remains extremely popular with Dogecoin investors who are in it for the long haul, you must always bear in mind that the crypto market is inherently volatile.
The value of Dogecoin can swing dramatically with potentially damaging short-term losses. While this could happen almost immediately after your investment or over a period, you must keep a cool head, and not sell off at the first sign of distress.
Should I Sell Dogecoin?
The burning question on DOGE investors’ minds is when should I sell Dogecoin? The answer to that boils down to some key factors.
To understand this better, it’s best to first learn more about the crypto market. While investing in DOGE is becoming increasingly trendy, with great long-term returns, factors could easily sway the opposite way with DOGE’s value nosediving.
Cryptocurrencies do not offer guarantees or backing by fiat currencies or businesses, so potential losses can have a devastating effect. The value of Dogecoin, like all other cryptocurrencies, is determined by the hype, demand, and use of them.
With this in mind, you can see that it’s not so straightforward to tell you exactly when to sell or HODL your Dogecoin.
Seasoned crypto investors are always scouring the market for the latest trends so that they can make the best investment decisions and minimize their risks. For those who are new to the game, it would be wise to take a leaf out of their book and ensure that you are properly educated on the market and kept up to date at all times.
While many new investors choose to wing it with a small investment, hoping to land a quick fortune, others are not as lucky and lose it all in the blink of an eye. With that being said, there are few telltale signs when considering “should I sell Dogecoin”.
A Crypto Exchange Drops DOGE
Often, altcoins, like Dogecoin, maintain their value because they are listed on popular crypto exchanges — adding greater credibility to the coin and instilling confidence from investors.
If a crypto exchange — especially a well-established exchange — suddenly stops listing DOGE, then it’s likely that other exchanges will follow suit and delist that crypto coin from their offering. In circumstances like this, investors will end up with dead crypto coins they will find difficult to offload.
While Dogecoin features in the top 10 cryptocurrencies in the world and has built an excellent reputation in the market, there are no guarantees in the world of crypto.
If ever you find crypto exchanges delisting Dogecoin, this would be a good time to sell as they probably have inside information that Dogecoin’s value may soon plummet.
Sell while you can before your entire Dogecoin investment goes down the drain!
You Have Invested All Your Money and Fear Market Volatility
A lot of the rationale behind either HODLing or selling your Dogecoin depends on how concerned you are about market volatility. If you have over-committed your Dogecoin investment and notice that its value is dipping a bit too much, you may need to revisit your investment strategies — although that’s a topic for another day.
If you find yourself in this situation, you can recover and let the value of your portfolio increase. Cryptocurrencies are volatile and many investors — especially the newer ones — end up panic-selling when there is no need to. Often, investors incur dramatic losses after which that crypto coin recovers in value — leaving those investors worse for wear.
To avoid making foolish decisions that can lose money, wise investors sell a portion of their Dogecoin that they can bank for their daily use. They then HODL the rest of their DOGE waiting for better days to arrive. By doing this, you can give yourself some financial stability and take this opportunity to gain a deeper understanding of the crypto market and your DOGE investment.
Your DOGE Is Becoming Less Popular
You should consider selling your DOGE when you find fewer investors are showing interest in it. This is a sign that Dogecoin is slowly fizzling out in value.
Assuming you do your research regularly on investor platforms like forums and community groups, you should be able to gauge the hype of Dogecoin and approximate its user base size.
If the number of users in the group is dwindling, or if user engagement is slowing down, it is a bad sign as people are no longer talking about Dogecoin. This lack of interest suggests that investors are committing their funds to other crypto projects.
Crypto coins need investors to survive and thrive, and need to be talked about often to encourage interest from other investors. If nobody is showing interest, Dogecoin’s value will drop and this may also lead to crypto exchanges delisting them.
If you find yourself in this situation, consider selling your Dogecoin before its value drops.
Government Regulations Make It Difficult To Hold Your Dogecoin
If your country’s government is tightening crypto regulations and clamping down on the activities of investors, it may be a good idea to sell your Dogecoin. Considering recent restrictions from many governments across the globe, not selling your Dogecoin in time could mean that you will lose your entire investment.
Many governments agree that the decentralized nature of cryptocurrencies can lead to unlawful activities, and make things as difficult as possible for investors to trade and use their cryptocurrencies. In some countries, crypto exchanges are expected to halt their activities almost immediately, leaving many investors out of pocket if they do not sell their crypto portfolios in time.
The UK, for example, has recently banned crypto exchanges from operating within their borders giving them a few days’ notice to stop their activities. Singapore recently announced that crypto companies would be banned from all forms of crypto advertising in the country with immediate effect.
Keep up to date with local laws in your country and act swiftly to sell your Dogecoin if you expect tighter regulations.
Another point to consider is if the government where Dogecoin was created imposes tighter regulations or bans on it. Here, Dogecoin’s creators are from Oregon, the USA, and Sydney, Australia — so keep up to date with the local laws in those countries regarding cryptocurrencies.
If those countries do plan to impose restrictions on Dogecoin, it may be a good idea to sell your DOGE. Usually, when a crypto coin incurs restrictions from the country that it is created in, that means that all mining activities for that coin will stop. If the country of origin trades and mines most of your DOGE, its value will drop when restrictions are imposed — making it a good time to sell before that happens.
A big part of understanding when to sell or HODL your Dogecoin is having the knowledge that it is never a good idea to HODL your entire investment. At the same time, it is never a good idea to commit all your funds to one specific crypto coin. Diversifying your portfolio is key!
The volatility of the crypto market means that there will be inevitable spikes and crashes that could make you want to pull your hair out. Patience is vital, and HODLing a portion while selling the rest will help you to hedge your investments effectively.
Part of the learning process with crypto investments is discovering what works best for you. By diversifying your portfolio, you can easily mitigate risks and ensure that your Dogecoin investment is given time to grow. Make sure to do your research before committing your funds – good luck!