Launched in 2013 as a joke, Dogecoin (CRYPTO: DOGE) still maintains its position in the top 10 largest cryptocurrencies in the world with a market cap of about $31.6 billion. This has surprised many investors, especially given that Dogecoin does not have many significant practical applications and often experiences high volatility.
The Power of Community and Social Media Spread
Dogecoin was originally created to mock the cryptocurrency boom, but its 'fun' and 'meme' nature has turned it into a phenomenon. Community support on social media platforms, along with mentions by many celebrities – including billionaire Elon Musk – has transformed Dogecoin from a joke into a noteworthy investment asset.
Recently, as the Trump administration took steps to support cryptocurrencies, the crypto market as a whole benefited, and Dogecoin was no exception. Over the past 12 months, DOGE has increased by about 100%, continuing its strong growth streak.
If You Invested $1,000 in Dogecoin 5 Years Ago, What Do You Have Now?
Notably, while Dogecoin often moves in line with Bitcoin and much of the crypto market, its volatility (beta) is much higher. This means that when the market rises, Dogecoin tends to rise even more sharply, but when the market falls, DOGE also drops deeper.
However, looking back over the past 5 years, Dogecoin investors have truly 'hit the jackpot'. An investment of $1,000 in DOGE 5 years ago is now worth over $60,000 – equivalent to a profit of over 6,000%. In comparison, the S&P 500 – a common measure of the U.S. stock market – has only increased by 87% during the same period, despite most of this time being a bull market.
Should You Invest in Dogecoin Now?
Despite impressive past performance, Dogecoin still carries many risks. With a large market cap but few practical applications, along with an almost unlimited supply, Dogecoin is unlikely to become a long-term 'store of value' like Bitcoin.
Those who 'bet' on Dogecoin over the past 5 years have certainly been rewarded handsomely. However, with high volatility and a lack of practical application, this remains more of a speculative investment than a long-term strategy. The advice for current investors: only invest what you are willing to lose.
