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With its playful canine mascot and endorsements from billionaires like Elon Musk and Mark Cuban, it’s not hard to see why investors love dogecoin. Since its creation as a bitcoin spoof in 2013, the cryptocurrency has gained cult status.
Buying in early has made some people very rich: Those who invested before the meme coin exploded in popularity in late 2020 saw the value of their holdings rocket by more than 7,000% to 74 cents by the middle of 2021. But dogecoin has big risks too. It dropped to less than 14 cents by the end of that year, and prices are now hovering around just 7 cents per coin.
That’s why it’s so important not to invest more than you can afford to lose.
If you do choose to buy dogecoin, here’s everything you need to know.
Choose an investing app
Using a cryptocurrency exchange is one of the easiest ways to buy dogecoin, bitcoin, ethereum and other crypto assets. A crypto exchange is a digital marketplace where people buy, sell and swap cryptocurrencies.
Most major crypto exchanges like Coinbase and Gemini offer access to dogecoin, but not all exchanges do the same. You can also buy dogecoin by downloading a mobile app such as Robinhood or Webull (but again, not every brokerage will offer dogecoin as an asset). These may be better options if you simply want to buy cryptocurrency and then sell for a profit in cash.
The downside to some crypto brokerage apps, however, is that you can’t do much else with your crypto. For instance, you may not be able to use your dogecoins to buy products where crypto is accepted or move them to an external crypto wallet that may provide better security.
Create an account
You can sign up for an account with a crypto exchange or brokerage online and in minutes. The sign-up process is relatively simple, but you may need to provide the following information.
- Full, legal name
- Date of birth
- Email address
- Phone number
- Home address
- Social Security number
- Driver’s license, passport, or other government-issued ID
- Bank account and routing numbers if you’re using a checking account to deposit money into your crypto account. This is the cash you will use to buy dogecoin within the crypto exchange or investing app.
Decide how much to invest
Financial planners generally recommend investing no more than 3% to 5% of your money — an amount you are willing to lose — in highly volatile assets like cryptocurrencies.
This is especially true when it comes to dogecoin, which is a highly volatile and unpredictable asset. Keep that in mind as you decide how much to invest.
Choose a payment method
After you open your cryptocurrency account, you can use a checking account to deposit money which you will use to purchase dogecoin. The bank transfer may take several days.
Some crypto exchanges also let you use your credit card to buy cryptocurrency, but be aware of the risks. The bank will treat the transaction as a cash advance, the same as if you borrowed cash from your credit card via an ATM and,. Because that kind of transaction carries a hefty interest rate, you could end up paying a lot more for your dogecoins than what they’re worth. And if dogecoin’s value goes down, you’re left with high-interest credit card debt and no crypto profits to pay it off.
To place an order for dogecoin, log into your crypto exchange or brokerage account. Find the search bar and type in “dogecoin” or DOGE. Once you find dogecoin, add the dollar amount you’d like to spend or the number of dogecoins you’d like to purchase. Then click the “buy” or “order” button and finalize your transaction.
Keep in mind that your broker or crypto exchange may charge trading fees for buying or selling cryptocurrency. You may see fees ranging from about 0.05% to 5% per trade, though every exchange is different. However, some investing apps that offer crypto such as Robinhood and Webull offer commission-free crypto trades.
Advantages and disadvantages of buying Dogecoin
Advantages of Dogecoin
Investors are often attracted to dogecoin by the potential for massive returns, but it’s important to remember that these returns are never guaranteed and impossible to predict.
Dogecoin is also easier to mine than bitcoin — the mathematical equations necessary to create new coins are easier and cheaper to complete. That means new dogecoins can be mined faster than new bitcoins, too. But this is a double-edged sword: Too many new coins and insufficient investor demand can drive down the price of dogecoin.
Disadvantages of Dogecoin
Unlike stocks or bonds, dogecoin doesn’t pay dividends or interest. It is not backed by any substantial assets, so if the public loses its fascination with dogecoin, the price could in theory fall all the way to zero.
And since there is no limit on how many dogecoins can be mined, dogecoin’s price will rise only if investors buy dogecoins faster than miners can produce them.
It’s also important to remember that dogecoin’s hype-driven rallies can be short lived. In mid-2021 dogecoin’s price doubled in less than a month after Tesla founder Elon Musk tweeted he would host Saturday Night Live, setting off rumors he would plug it on the show. As it happened, Musk called the meme coin “a hustle” and during the show, its price plunged by nearly 30%.
Where can you buy Dogecoin online
You can buy dogecoin by opening an account with a crypto exchange like Coinbase, Binance, or Kraken or Gemini. You can also access dogecoin through investment apps like Robinhood, SoFi, Webull and eToro.
How to buy dogecoin FAQs
What is dogecoin?
Dogecoin is a cryptocurrency created in 2013 as a joke based on the popular meme of a Shiba Inu dog that speaks broken English.
Despite its quirky origins and an initial price of less than a penny, dogecoin boasted a market capitalization of more than $10 billion in March 2023. Its popularity is fueled by backers such as Elon Musk, Mark Cuban and Snoop Dogg. It's also amassed a dedicated following across social media platforms like Reddit and Twitter.
When did dogecoin start?
What is the difference between bitcoin and dogecoin?
Bitcoin is the most popular cryptocurrency, with a market capitalization of nearly $550 billion, compared to dogecoin's $10 billion market cap.
Bitcoin and dogecoin exist on a digital public ledger called a blockchain. Both use "proof-of-work" frameworks, meaning that cryptocurrency creators called "miners'' compete with each other using powerful computers to solve complex mathematical codes that verify crypto transactions and earn themselves new coins.
Unlike with Bitcoin, there's also no limit to how many dogecoins can be created. Bitcoin's software ensures there will never be more than 21 million bitcoins in circulation. By contrast, as of March 2023 there were more than 138 billion dogecoins in circulation, according to CoinMarketCap, a cryptocurrency analysis platform.
Where can I buy dogecoin?
What are the most recommended options to store dogecoin?
For added security measures and flexibility, some crypto enthusiasts move their dogecoins into a crypto wallet outside one provided by the crypto exchange or brokerage platforms.
Crypto wallets are software or physical devices that contain the keys or passwords that give you access to your cryptocurrency balance on the blockchain, a digital ledger where your cryptocurrency actually lives. These keys also allow you to send, receive and spend cryptocurrencies like dogecoin and bitcoin — a feature absent from many of the crypto wallets provided by brokerages.
Crypto wallet manufacturers claim to offer higher levels of protection than exchanges or brokerages do. On the other hand, many crypto exchanges offer some kind of insurance to protect cryptocurrency holdings.
Crypto wallets come in two forms. Hot wallets are software connected to the internet. You create a password you use to access the digital wallet. For security, many hot wallets are encrypted and require two-factor authentication before you log in to your account.
Cold wallets or hardware wallets are physical devices where you store your crypto keys. Think of it as a flash drive that holds the keys to your cryptocurrency instead of files. The only way a thief could steal cryptocurrency from a cold storage wallet is by accessing the device itself as well as your password details. Experts say cold storage wallets are the safest way to store crypto assets.
How much is dogecoin worth?
Why is dogecoin dropping?
Because dogecoin isn't backed by claims on any asset, it can be difficult to say what drives its price up or down. However, there are a few factors that appear to influence its price.
Dogecoin's price tends to move in concert with other cryptocurrencies. That's what happened in early 2022, when worries that the Federal Reserve would hike short-term interest rates sent cryptocurrencies tumbling across the board. In the span of roughly a month, dogecoin's price declined roughly 25%. The drop was similar to declines for bitcoin and many other coins.
News and social media coverage can also drive bitcoin's price. For example, in spring 2021, dogecoin soared to a high of about 74 cents after Elon Musk — who often expresses his enthusiasm for dogecoin on Twitter — announced that he will would host SNL, setting off rumors that he would mention the alt-coin. However, when Musk ended up poking fun at dogecoin instead, its price quickly plunged to less than 50 cents.
How high will dogecoin go?
Dogecoin reached a high of about 74 cents in May 2021, before dropping to about 14 cents by the end of the year.
In January 2022, dogecoin spiked by about 9% after Elon Musk announced Tesla would accept it as payment for some of its merchandise.
In spring 2022, the AMC movie theater chain announced that it would accept dogecoin as payment for online concessions and ticket purchases. The dogecoin community has been encouraging McDonald's to accept dogecoin, but the effort has been unsuccessful so far. Very few mainstream retailers accept dogecoin for payments.
No one has a crystal ball when it comes to cryptocurrencies — it's difficult to predict exactly when dogecoin's price spikes or drops will happen, and how extreme they will be.
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