Every dog has its day, and in the world of cryptocurrencies the luckiest dog today is Dogecoin (DOGE). Recently Elon Musk has replaced the Twitter logo with the official Dogecoin mascot, a Shiba Inu dog. Why? Good question, but the move has propelled the original memecoin back into the list of the top ten cryptocurrencies.
What Is Dogecoin?
Dogecoin is a cryptocurrency created by Billy Markus and Jackson Palmer in 2013 as a joke, making fun of the wild speculation of the crypto market at that time.1
Similar to other digital currencies, Dogecoin operates on a blockchain network and is secured by cryptography. A promising feature is its fast transaction speed with low transaction fees, which makes it attractive for micro-transactions. Additionally, the Dogecoin community has a history of supporting charitable causes and individuals, including raising funds for the Jamaican bobsled team, collecting donations to build a well in Kenya, and sponsoring NASCAR driver Josh Wise.2
Dogecoin made headlines in February 2023 when one of Elon Musk’s tweets caused a spike in Dogecoin’s price.3 Additionally, in December 2022, the Dogecoin Foundation announced a new fund of 5 million DOGE (around $345,000 at the time) to support the development of the cryptocurrency’s ecosystem to help ensure the longevity and sustainability of Dogecoin.
How To Buy Dogecoin In 5 Steps
1. Consider How Much You Want to Invest in Dogecoin
While there are viral stories of people who invested trivial amounts in DOGE but are now millionaires, invest with caution. Cryptocurrencies are very risky investments, and Dogecoin is uniquely volatile because it has an unlimited supply.
Here’s how that works: For Dogecoin’s price to increase or even remain steady, investors have to buy more coins continually. Otherwise, the supply of DOGE rises rapidly and diminishes the value of all the coins already in circulation (think inflation on steroids).
The limit on the number of Dogecoins was expressly removed by one of its creators to discourage people holding onto it long term. That’s in stark contrast to other major cryptocurrencies like Bitcoin (BTC), which have caps on how many coins are issued. This creates scarcity, which helps coins retain their value.
When deciding how much to invest, consider your overall financial situation, investment portfolio and risk tolerance. Experts don’t recommend you invest more than you’re willing to lose with cryptocurrencies in general.
2. Decide on a Cryptocurrency Exchange
To purchase Dogecoin, you’ll need to open an account with a cryptocurrency exchange, where buyers and sellers meet to exchange cryptocurrency for dollars. Popular exchanges include Coinbase and Kraken, which offer simple, easy-to-use platforms. You can also purchase crypto using beginner-friendly investment apps like Robinhood.
While Dogecoin remains a wildly popular choice, it is not universally available on all crypto exchanges. Make sure any exchange you’re considering has DOGE available for purchase if you wish to buy it.
Whichever platform you choose, consider transferring your coins off of the app. Some investors prefer to move their crypto into separate crypto wallets to protect their coins from hackers.
However, I can provide some well-regarded options to consider:
- Coinbase: A popular and user-friendly option, especially for beginners, with a strong reputation for security. However, they may have higher fees compared to some other exchanges. Coinbase allows you to buy DOGE directly with fiat currency (like USD) using various payment methods.
- Binance: One of the world’s largest crypto exchanges, offering a wide variety of cryptocurrencies and trading features. Binance can be a good choice for experienced users who want access to more advanced features, but the platform might be more complex for beginners. Keep in mind, Binance may not be available in your region due to regulations.
- KuCoin: Another popular exchange with a user-friendly interface and competitive fees. KuCoin offers a good selection of cryptocurrencies, including DOGE.
Here are some additional tips for choosing a DOGE exchange:
- Security: Make sure the exchange has a good security record and offers features like two-factor authentication.
- Fees: Compare the fees charged by different exchanges, including trading fees, withdrawal fees, and deposit fees.
- Payment Methods: Consider what payment methods the exchange supports (e.g., bank transfer, credit card).
- Regulation: Check if the exchange is regulated in your jurisdiction.
Remember, it’s important to do your own research before choosing a cryptocurrency exchange.
3. Select a Payment Option
Before you can begin trading cryptocurrencies, you must deposit money in your exchange or brokerage account. In most cases, the exchanges will let you deposit money from a checking or savings account. Some accept wire transfers and PayPal transfers.
Typically, you get instant access to a portion of the money of your deposit for trading. If you deposited a large amount of money—typically more than $1,000—you may have to wait a few days for the transfer to clear before you can use the entire deposit.
A few exchanges allow you to use a credit card to buy Dogecoin. Before using a card to finance your crypto purchases, keep in mind that your credit card company will consider the money to be a cash advance and charge added fees and a higher APR. This can make investing in crypto even pricier and riskier. That’s why experts generally encourage people to avoid buying crypto this way.
4. Place Your Order for Dogecoin
Once your money is in your account, you can purchase Dogecoin. On the exchange’s trading or purchase platform, search for Dogecoin or enter its ticker symbol, DOGE. Then pick your trade type and input either the dollar amount you want to invest or specify how many Dogecoins you want to buy.
Once you place the order, it should go through immediately. Like other cryptocurrencies, Dogecoin isn’t limited by trading hours; you can buy and sell Dogecoin 24 hours a day, seven days a week.
Here’s a step-by-step guide:
- Choose a Cryptocurrency Exchange: As mentioned before, there are several reputable exchanges that support DOGE trading. Consider factors like security, fees, ease of use, and your location when making your choice. (e.g., Coinbase, Binance, KuCoin).
- Fund Your Exchange Account: You’ll need funds in your exchange account to purchase DOGE. Most exchanges allow deposits through bank transfers, credit cards, or other payment methods. Check your chosen exchange’s deposit options.
- Navigate to the Trading Section: Once you have funds in your account, locate the trading section of the exchange. This will typically have an interface for buying and selling cryptocurrencies.
- Find the DOGE Trading Pair: Look for the trading pair that includes DOGE and your preferred currency (e.g., DOGE/USD).
- Place a Buy Order: There will be two options: buy and sell. Since you want to purchase DOGE, select the buy option. You’ll then need to specify:
- Order Type: There are different order types, but for a basic purchase, you can likely choose a “market order” which will buy DOGE at the current market price. Alternatively, you can place a “limit order” specifying the price you’re willing to pay for DOGE.
- Amount: Enter the amount of DOGE you want to purchase.
- Review and Confirm: Double-check your order details (amount, price, order type) before confirming the order.
5. Consider Your Storage Options
When you buy Dogecoin, it’s by default kept in your exchange’s or brokerage’s crypto wallet. Because these are generally connected to the internet, some investors prefer to withdraw the crypto they purchase from their exchange or brokerage and store it in another wallet.
You can choose to store your Dogecoin in a hot wallet or a cold wallet outside of your exchange. Hot wallets are digital and connected to the internet whereas cold wallets are physical hardware that you can disconnect, making them much less susceptible to hacking.
Cold wallets, however, are generally more expensive than hot wallets, and you also run a greater risk of being unable to access your crypto currency if you lose or forget the password necessary to get into your cold wallet.
How to Sell Dogecoin
If you’d like to sell your Dogecoin, the process is very straightforward. You’ll go to your holdings on your crypto exchange or brokerage platform and enter the amount you’d like to sell. Then your order will be processed.
If you have made a profit investing in Dogecoin, you will likely have to pay capital gains tax. Failure to pay taxes on your crypto gains can result in substantial issues, including expensive penalties. If you’re not sure how to report your DOGE profits, consult a tax professional.
The process of selling Dogecoin (DOGE) generally involves transferring your DOGE to a cryptocurrency exchange that supports DOGE trading and then selling it for your preferred currency (usually fiat currency like USD). Here’s a general breakdown:
- Transfer DOGE to an Exchange: You’ll need to have a DOGE wallet connected to an exchange that allows DOGE trading. If your DOGE is currently in a separate wallet, you’ll need to initiate a transfer to your exchange wallet address.
- Sell DOGE for your Preferred Currency: Once your DOGE is in your exchange wallet, navigate to the trading section. Look for the DOGE trading pair with your preferred currency (e.g., DOGE/USD). Place a sell order specifying the amount of DOGE you want to sell and the price you want to receive.
Here are some additional things to keep in mind:
- Exchange Selection: The specific steps might vary depending on the exchange you use. Refer to your chosen exchange’s support documentation for detailed instructions.
- Fees: Be aware of any fees associated with selling DOGE on the exchange. These may include trading fees, withdrawal fees (if you want to transfer your sold funds out of the exchange), and potentially network fees.
- Security: Make sure you’re logged in to the legitimate exchange platform and double-check the wallet address before transferring your DOGE.
Here are some resources that might be helpful:
- Kraken – Sell Dogecoin: https://www.kraken.com/learn/sell-dogecoin-doge (illustrates selling process)
- BitPay – Sell Dogecoin: https://bitpay.com/sell-dogecoin/?crypto=DOGE (highlights different payout methods)
Should I Buy Dogecoin?
While Dogecoin infamously started out as a joke, investors take it a lot more seriously now. However, it’s still a very risky investment. That’s why experts recommend investing no more than 3% to 10% of your portfolio in cryptocurrencies.
How much you ultimately decide to invest in Dogecoin should be guided by your risk tolerance and your current financial situation. For example, if you’re behind on your retirement savings and don’t have an emergency fund, you should invest less money in Dogecoin. If you’re financially stable, are on target to meet your retirement goals and have a large financial cushion in the bank, you may be willing to invest more of your portfolio in Dogecoin.
Unsure if buying Dogecoin is right for you? Find a financial planner near you to discuss your goals and investment options.
Is DOGE a Good Investment ?
Dogecoin gained significant attention in 2021 during a crypto market bull run. The rally, supported by figures like Elon Musk, propelled Dogecoin into the upper echelons of cryptocurrencies by market capitalization. It also ushered in a new category of meme tokens, starting with Shiba Inu (SHIB).
Beyond its meme coin status, Dogecoin presents an attractive opportunity to drive cryptocurrency adoption with a low entry barrier compared to Bitcoin. Despite its origins as a joke, DOGE crypto serves a legitimate purpose in promoting mass adoption as a payment method.
The Bottom Line
Choose a reputable exchange: Security is paramount, so pick a well-established exchange with a good track record. Consider factors like fees, ease of use, and regulations in your area (e.g., Coinbase, Binance, KuCoin).
Fund your account: Deposit funds into your exchange account using a supported method like bank transfer, credit card (depending on the exchange), etc.
Trade for DOGE: Locate the DOGE trading pair (e.g., DOGE/USD) and place a buy order. You can choose a market order for the current price or a limit order at your desired price.
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Coin Data Cap does not recommend that any cryptocurrency should be bought, sold or held by you, Do Conduct your own due diligence and consult your financial adviser before making any investment decisions!
