Table of Contents
In the unconventional world of cryptocurrency investments, where prices fluctuate wildly and regulation in Australia is largely non-existent, one coin manages to attract considerable attention.
Dogecoin, aka DOGE, is based on a viral internet meme of a Japanese Shiba Inu, and was originally created as a joke version of bitcoin. The coin’s official X bio states: “Dogecoin is an open source peer-to-peer digital currency, favoured (sic) by Shiba Inus worldwide. Elon Musk thinks we’re pretty cool.”
Despite its playful origin story, dogecoin is just as volatile as every other type of cryptocurrency, reaching an all-time high of 73 cents in May 2021, before plummeting 78% lower a mere year later. As of May 16, 2024, one dogecoin was trading for around 15 US cents.
Does this mean Australian investors should be piling in now and buying the dip? Or is now the moment to steer clear?
And, if so, should the whole cryptocurrency concept be given the widest of berths? The Australian co-creator of dogecoin certainly thinks so. Yes, you read that correctly: dogecoin founder Jackson Palmer is no longer a fan of crypto, claiming in a recent interview that the asset class is ‘parasitic’ and a haven for grifters.
Here’s what you need to know about dogecoin so you can make up your own mind.
Featured Partners
1
eToro
Invest with a crypto brand trusted by millions
Buy and sell 100+ cryptoassets on a secure, easy-to-use platform
2
Independent Reserve
Trading Fees:
0.50% – 0.02%
Best for:
Sophisticated investors, SMSFs, businesses and trusts
Benefits:
Fast deposits, advanced trading tools and reporting
3
bitcoin.com.au
Trading Fee:
1%
Best for:
Beginners to crypto and investing
Benefits:
Easy to use, instant deposits using credit card, PayPal and bank transfer
Crypto assets are unregulated & highly speculative. No consumer protection. Capital at risk.
First, the Crypto Wealth Warning
If your financial plans require you to sleep easily at night, most cryptocurrencies are probably not for you. Cryptocurrencies are inherently volatile and that has authorities worried.
CHOICE has been calling for regulations to better protect consumers for years, arguing in a submission to the federal government that cryptocurrencies should be subject to the same consumer protection obligations as traditional financial services. The federal government is midway through mapping out the process of regulating crypto in Australia, and has announced plans to force exchanges to take out AFSL advice licences. Legislation outlining how crypto will be regulated is due to be introduced into Parliament later this year.
And there are many in the broader global financial community who have concerns. For example, Susannah Streeter, senior investment and markets analyst at UK-based financial adviser Hargreaves Lansdown, says: “If people dabble in products they don’t fully understand, they risk losing all their money.”
Therefore, not only are cryptocurrencies notoriously volatile but, unlike other parts of the financial services market, investors aren’t eligible for compensation if things go wrong.
Some aggrieved former investors, however, are agitating for compensation. US investor, Keith Johnson, launched a lawsuit against Elon Musk, for $US258 billion, claiming that Musk caused investors to lose around $US86 billion through his enthusiastic promotion of DOGE on Twitter/X.
Fair Enough. But What Is Dogecoin?
Which brings us back to dogecoin, a cryptocurrency popular with amateur investors that’s even been labelled as ‘the people’s crypto’ by Musk.
Dogecoin (trading ticker DOGE) was invented in 2013 by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer (mentioned above). Their aim was to create a joke version of the already established bitcoin to give the public a friendly way to get to grips with the world of crypto-assets.
To the engineers’ surprise, people started using dogecoin as soon as the product was released. Tesla recently integrated dogecoin payments into its platforms, allowing customers to buy some Tesla products with DOGE. Crypto experts, however, claim the cryptocurrency’s underlying technology and overall usefulness is not on a par with the likes of bitcoin and ethereum.
How Has Dogecoin Performed?
Dogecoin may have started off as a joke, but its numbers are serious. The coin’s value has risen by more than 177,503% since 2015, when it hit a low of $US0.0000869. During 2021 alone, DOGE rose by more than 14,000%, peaking at an all time high of more than 70 cents. However, since May 2021, dogecoin’s price has fallen and is currently trading at around 15 US cents. CoinMarketCap puts its market capitalisation at around $US22 billion—down from a high of $US70 billion in 2021.
In comparative terms, it remains a relative minnow behind the big two: bitcoin with a market cap of $US1.3 trillion and ethereum at $US359 billion.
What’s Triggered Dogecoin’s Price Movements?
In 2021, dogecoin’s standing was enhanced by tongue-in-cheek endorsements from high-profile names, including rapper Snoop Dogg and Gene Simmons, front man of rock group, Kiss.
More significantly, a 2019 Twitter poll decided Elon Musk should be dogecoin’s chair. The Tesla boss saw the funny side and, since then, has played along with the exercise, issuing supportive tweets saying dogecoin is his favourite cryptocurrency. As mentioned above, Tesla recently enabled dogecoin payments, further boosting the fortunes of the coin.
With his personal Twitter account boasting 100 million followers, even a fleeting pro-dogecoin comment from Musk has the effect of bolstering the cryptocurrency’s popularity and therefore its investment appeal.
In a previous tweet, Musk went so far to describe himself as ‘The Dogefather’.
How To Buy Dogecoin In Australia
As dogecoin’s popularity has increased, so its availability has widened. Australian investors can buy the cryptocurrency via bank transfer or credit/debit card in AUD on a variety of exchanges, including Binance, Kraken or Coinspot.
In recent times, additional online providers, such as Gemini and eToro, have also announced that dogecoin can now be bought via their platforms, thus expanding the potential number of Australian investors who may decide to get on board.
Featured Partners
1
eToro
Invest with a crypto brand trusted by millions
Buy and sell 100+ cryptoassets on a secure, easy-to-use platform
2
Independent Reserve
Trading Fees:
0.50% – 0.02%
Best for:
Sophisticated investors, SMSFs, businesses and trusts
Benefits:
Fast deposits, advanced trading tools and reporting
3
bitcoin.com.au
Trading Fee:
1%
Best for:
Beginners to crypto and investing
Benefits:
Easy to use, instant deposits using credit card, PayPal and bank transfer
Crypto assets are unregulated & highly speculative. No consumer protection. Capital at risk.
Should You Buy Dogecoin?
When it comes to cryptocurrencies of any variety, financial professionals advise caution.
After all, any asset that potentially appreciates purely on the back of a mention during a prime-time TV show or social media thread is worth pausing to think about before hitting the ‘buy’ button.
Laith Khalaf, financial analyst at AJ Bell, says: “Dogecoin in some ways epitomises cryptocurrency, having started as a joke, and now finding itself surging in value. This highlights how difficult it is to predict with any accuracy which cryptocurrencies, if any, will end up staying the course.
“This sort of flippant, devil-may-care approach to life is entirely commendable in the context of a bit of entertainment, but it doesn’t make such a good bedfellow to sound financial planning.”
Hargreaves Lansdown’s Susannah Streeter is similarly wary: “Investors should be extremely cautious about getting caught up in this herd mentality because dogecoin is very much a speculative bet whose valuation has no reliable basis.”
“Demand has come from traders trying to ‘game’ the system and others hoping to benefit from future price rises rather than use the coins as a means of exchange. Predicting the point at which demand subsides and prices begin to fall is very difficult, if not impossible.”
And, as with many fashionable investment opportunities from the tulip fever of the 1630s to the dot.com bubble of the early 2000s, there is also a fear-of-missing-out factor at play.
Whatever you decide, the resounding opinion of financial experts is to only invest what you can afford to lose.
This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.
Frequently Asked Questions (FAQs)
How was dogecoin created?
Dogecoin (or DOGE) was created by US-based Billy Markus and Sydneysider Jackson Palmer. It was forked from Litecoin in December 2013, and was intended as a joke version of bitcoin, based on the popular Shiba Inu meme. No one was more surprised than the creators when it gained a large number of boosters, no doubt helped along by sporadic praise from Elon Musk, Gene Simmons and Snoop Dogg. (Palmer has since distanced himself from DOGE and cryptocurrency more broadly.)
How is dogecoin different from bitcoin?
Dogecoin was intended as a joke version of the first ever cryptocurrency bitcoin, although it has since gained a high degree of popularity in its own right. Despite both coins are inherently volatile, bitcoin is different to dogecoin in many ways: most notably market capitalisation and value. While BTC is the number one coin in the sector, with a market cap of $US1.3 trillion and a price hovering around $66,000 (as of May 16, 2024), DOGE is worth US 15 cents, with a market capitalisation of $US22 billion. Furthermore, the total supply of dogecoin is uncapped, whereas bitcoin is capped at 21 million coins. Dogecoin has been used primarily as a tipping system on Reddit and Twitter, although a number of companies, including Tesla, accept DOGE as a form of payment.
What is a dogecoin address?
Your dogecoin address is attached to your digital wallet and acts as your unique identifier when making transactions. A dogecoin address always begins with the letter D and is followed by a list of characters and numbers.
How do I find my dogecoin address?
Head to your dogecoin wallet desktop app, right click on the tab ‘Much Receive’ and then select ‘copy address’. Paste the address into a clipboard or file to use as needed.
Is dogecoin really a good investment?
Whether dogecoin is a good investment depends on your risk tolerance and investment goals. As of May 16, 2024, dogecoin’s price sits at 15 US cents, having experienced significant volatility influenced by social media buzz and high-profile endorsements, such as Elon Musk’s support. The recent integration of dogecoin payments for some Tesla products has increased its visibility and potential use cases. However, like all meme-coins, it remains a speculative and high-risk investment. Only invest what you can afford to lose and conduct thorough research before making any investment decisions.
Can dogecoin reach $1?
Dogecoin reaching $1 is not out of the question, given its historical performance. In May 2021, dogecoin reached an all-time high of over 70 US cents, demonstrating the potential for significant price appreciation. As of May 16, 2024, dogecoin’s price sits at 15 US cents, meaning it would need to increase by more than six times to reach the $1 milestone.
Achieving this would require a substantial rise in adoption and demand, outpacing dogecoin’s growing supply. High-profile endorsements from the likes of Elon Musk and the recent news of Tesla’s Dogecoin payment integration, have increased the project’s visibility. However, given the volatility of cryptocurrencies, predicting if or when dogecoin might reach $1 remains challenging, and investors should conduct thorough research and understand the risks before deciding to invest.
