1 Top Cryptocurrency to Buy Before It Soars 150%, According to a Popular Analyst

Dogecoin (CRYPTO:DOGE) has experienced some wild volatility over the past three years. The cryptocurrency was launched in 2013 as a parody of Bitcoin (CRYPTO: BTC), named after the Shiba Inu dog meme. It was worth just $0.01 at the beginning of 2021, but rose to a record high of $0.73 on May 8 of that year.

This rally was driven by two main headwinds. First, a mix of social media buzz, low interest rates, and stimulus checks has sparked a buying frenzy in cryptocurrencies, meme stocks, and other speculative investments in 2021. Secondly, celebrities such as Elon Musk, Mark Cuban and Snoop Dogg joined the bandwagon. and introduced Dogecoin to their social media followers.

Image source: Getty Images.

But today Dogecoin is only worth around $0.16. Rising interest rates have driven investors away from speculative investments like cryptocurrencies, and many of the smaller altcoins in the market have collapsed as a new crypto winter begins.

Faced with these challenges, many investors may find it wiser to stick with “blue chip” cryptocurrencies like Bitcoin and Ether. Still, some investors believe Dogecoin could recover in the near future.

Altcoin Sherpa, the pseudonym of a closely followed crypto analyst with nearly 217,000 followers on . Let’s see if this perspective makes sense and will investors become more optimistic about this volatile meme coin?

What is the bullish situation for Dogecoin?

Altcoin Sherpa’s bullish sentiment on Dogecoin is based on the belief that retail investors will buy it again, that it has great liquidity, has low downside relative to other meme coins, and is more attractive than many smaller altcoins.

He also believes that a single tweet from Elon Musk would be enough to “blow up.” In the past, several of Musk’s tweets about Dogecoin — along with Tesla accepting Dogecoin payments and Twitter’s logo being temporarily changed to a Shiba Inu last year (before rebranding as X) — have driven up the price of the meme coin.

But Dogecoin still has fewer catalysts than other cryptocurrencies

Dogecoin may be more stable than other smaller altcoins, but it also has fewer long-term catalysts than Bitcoin and Ether. It’s now accepted as a payment method at a few businesses, but its variable price makes it more of a publicity stunt than a realistic payment option for most customers.

Regulators don’t seem very impressed with Dogecoin either. Last September, the New York State Department of Financial Services removed Dogecoin from its “green list” of eight regulated cryptocurrencies, including Bitcoin, Ether, and six stablecoins from PayPal and Gemini. This exclusion indicates that this is still a highly speculative investment.

The story continues

Dogecoin’s blockchain platform also cannot be used natively to develop decentralized applications. This is because it was forked from the Bitcoin blockchain, which did not initially support the development of applications, and uses the same energy-intensive proof-of-work (PoW) method to issue its tokens.

In comparison, Ethereum, Solana, and Cardano use the more energy-efficient Proof of Stake (PoS) method, which is widely adopted in the development of decentralized applications and smaller tokens. Dogecoin’s supporters later launched a separate blockchain network, Dogechain, to support Dogecoin-based applications, but it is not as widely used as other decentralized platforms.

There is also evidence that investors are losing interest in Musk’s views on Dogecoin. This April, he casually tweeted about its growing popularity, but its price remained virtually unchanged. This declining interest runs counter to Altcoin Sherpa’s view that “all it would take” to push Dogecoin higher would be another bullish tweet from Musk.

Investors should be skeptical about Dogecoin’s future

Dogecoin’s future may be brighter than many smaller altcoins on the market, but I cannot say for sure that it will increase by 150% in the near future. Interest rates remain high, and new Bitcoin ETFs and upcoming Ether ETFs could push many investors away from smaller altcoins and meme coins even if the crypto winter is over.

Therefore, instead of following pseudonymous crypto analysts with a large social media following, investors should do their own due diligence and understand that Dogecoin could easily lose 50% in value before doubling or tripling in value in this difficult market.

Should you invest $1,000 in Dogecoin right now?

Before buying stock in Dogecoin, consider:

The Motley Fool Stock Advisor analyst team identified what they believe are the 10 best stocks for investors to buy right now… and Dogecoin wasn’t one of them. The 10 stocks that made the cut could deliver monster returns in the coming years.

Consider that Nvidia made this list on April 15, 2005… if you had invested $1,000 on the date we recommended, you would have had $740,688!*

Stock Advisor offers investors an easy-to-follow success plan, including guidance on portfolio construction, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of the S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of June 3, 2024

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, PayPal, Solana, and Tesla. The Motley Fool recommends these options: Short calls on PayPal for $67.50 in June 2024. The Motley Fool has a disclosure policy.

The 1 Best Cryptocurrency to Buy Before It Rises 150%, According to a Popular Analyst Originally published by The Motley Fool