Dogecoin price: DOGE ‘gold rush’ may still end in ‘catastrophic crash’, warns expert

Dogecoin ‘is pure speculation and will end badly’ says Yusko

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Dogecoin has gone from strength to strength this year after a frenzied rush began to buy the digital asset in February. DOGE’s success on the crypto markets has been attributed to the likes of tech mogul Elon Musk stirring up DOGE mania with frequent mentions and tweets about the cryptocurrency. As a result of the newfound interest in the “memecoin”, DOGE returns are now up more than 8,000 percent on last year.

Dogecoin is exchanging hands for £0.274277 ($0.383633) per token, according to the latest Coindesk data at 5.59pm BST.

Although this might seem trivial compared to flagship token bitcoin (BTC), DOGE has been trading for fractions of a penny for years.

Created in 2013 as a joke featuring a popular online meme of a Shiba Inu dog, DOGE did not exist outside of a close-knit community of early adopters.

But eight years on and dogecoin is the most talked-about virtual token, with a market cap exceeding that of many well-established businesses.

According to Coindesk, the token’s market cap is now more than £35.5billion ($49.66billion) – more than Tesco, more than John Lewis, more than Boots.

Billionaire Mark Cuban recently told CNBC DOGE will find its level as the “supply and demand is undefeated”.

Mr Musk, meanwhile, tweeted about “Doge barking at the Moon” – a reference to a 1926 painting by Spanish artist Joan Miró and to dogecoin’s astounding gains.

But all of this success may be temporary, according to Mohammad Uz-Zaman, International Private Client Wealth Manager at ADL Estate Planning.

The expert fears DOGE’s recent movements have mostly been driven by wild speculation and an opportunity for short-term gains.

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He told Express.co.uk he thinks a correction may very well be around the corner, as cryptos are not as stable as more conventional investment options.

Other experts have recently argued the same point: the DOGE bubble “eventually has to burst”.

Mr Uz-Zaman said: “Dogecoin like all other cryptocurrencies have absolutely no utility.

“This means their price is driven up solely by speculation.

“Rarely do investors have a long-term investment strategy, holding cryptos for less than 100 days or even fewer than 14 days which is in part the reason why we see so much volatility.

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“I appreciate bitcoin has outperformed all other asset classes over the past decade and the recent buzz around dogecoin is creating the equivalent of a gold rush but make no mistake.

“You can’t adorn yourself with cryptos and they have no legitimacy as legal tender and if investors en masse require access to traditional forms of cash or government policy towards cryptos changes for the worse, especially around anti-money laundering controls, I would not be surprised if we see a catastrophic crash.

“Most people should stick to traditional long term managed funds in a tax-efficient wrapper and if you do decide to invest, remember ‘high risk may mean high returns but could also mean high losses.'”

There is a lot of excitement around dogecoin and long-time holders are keen to see DOGE hit the elusive £0.72 ($1) mark.

Even so, you should be very careful with the crypto markets – or traditional investing – if you are looking for ways to invest your money.

You should never invest more than you are prepared to lose, and experts always advise diversifying your portfolio to maximise profits and to manage losses.

The Financial Conduct Authority’s (FCA’s) official position on cryptocurrencies is they are purely speculative, high-risk options.

The FCA said: “If you invest in cryptoassets, you should be prepared to lose all your money.”

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