Is Dogecoin a Scam? 13 Things You Need To Know Before Investing In DOGE

is dogecoin a scam

Investing in Dogecoin – What You Need To Know

Is Dogecoin a scam? Is it worth investing in it? Will Dogecoin crash? Will it become a common global currency? All these are questions that investors and investor-wannabes are asking these days, specifically after this cryptocurrency seems to be inflated – artificially or not – by unorthodox practices and celebrity tweets.

And to make matters even more interesting, you have heavy financial hitters such as Elon Musk promoting and talking about Dogecoin in its Saturday Night Live appearance. The Tesla CEO seems to be enamored with it and even has an influence on the pricing, which is quoted as being called the “the Musk effect.” As many notices, this occurs when Mr. Musk talks even about poop, and the value increases substantially.

So, what the heck is all of the Dogecoin hype about, and what can it mean for you? Is this cryptocurrency just a scam promoted by a billionaire, or is there a real opportunity to invest in something that can make substantial gains for your financial future? Let’s try to break things down when it comes to cryptocurrency scams and figure out what the Dogecoin discussion is all about.

In this article, we’ll show some Dogecoin pros and cons, as well as feature opinions from somehow experienced people in the field.

investing in doge

1. Fact or Fiction

Dogecoin is one of many cryptocurrencies that exist in the world today. Essentially, as you probably know by now, cryptocurrency is promoted as a highly secure digital currency. It is touted as a form of currency that cannot be counterfeited and exist “virtually.”

According to Investopedia, it is “a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based in blockchain technology – a distributed ledger enforced by a disparate network of computers.”

In essence, Dogecoin is a virtual type of money that does not jingle in your pocket but rather exists virtually in a “wallet.” This wallet claims to be secure and allows you to skip the bank and use this form of currency online for different types of transactions.

To reference back to whether Dogecoin is real or a fictional example of finance, you can almost say it is both – it is a virtual monetary replacement that is currently being touted by one of the world’s richest men, who is also currently the “community-appointed CEO” according to an article published by Mike Novogratz.

2. It Started as a Joke

Dogecoin essentially started as a joke online with a token picture of a Shiba Inu dog – it was created to pass between online users, named shibes, and was a fun way for users to “pay” one another. As Dogecoin became more well-known, there were multiple scams and sham exchanges that caused the minimal financial worth of Dogecoin to ebb and flow.

Although not about the money per se, multiple scams surrounding Dogecoin before 2014 obliterated Dogecoin, leaving it one of many cryptocurrencies with poor coding, minimal resources or attention, and no real value.

“There is no doubt that the Doge craze this year is nothing but the symptom of the end of another crypto bubble”. There are some activities that are morally wrong; however, as financial regulations are rarely regulated, and as many argue that regulations do not apply to these cryptocurrencies, they are unmitigated.”, says Jiulin Teng, from DrJLT.com.

“Dogecoin is the original meme coin. Despite written as Doge, it is actually a Dog coin. It was introduced as a mockery to cryptocurrencies, particularly Litecoin. The pump this year is very clearly validating this intuition.”

“However, we need to criticize the regulators for this. These influencers make unfounded claims on Bitcoin ($1M, institutional investors piling in…) and are never investigated. If financial regulations are enforced, some of the most egregious offenders should be in prison now.”

Even if it started as a joke, Dogecoin got the point where it’s endorsed by Elon Musk, which is not a small detail.

While many feel that cryptocurrency is the wave of the future, is it worth investing in? What are the inherent risks of investing in Dogecoin, or should we all start to embrace the world of cryptocurrency and remove ourselves from the government oversite of financial transactions?

3. Why Is Dogecoin So Popular?

With the influx of social media exposure and the push by Musk, Dogecoin has elevated itself into the daily conversation of many. With this seemingly expansive support by popular billionaires, Dogecoin has inflated to one of the top cryptocurrency options. According to cnbc.com, Dogecoin’s price has surged roughly 600% in just a few weeks and 11,000% since the beginning of the year.

Dogecoin was hyped during a TikTok video in 2020, but not much happened after that time. The recent push with Elon Musk and Snoop Dogg has escalated the popularity and made it a current hit, particularly on social media.

At the end of the day, it’s just another cryptocurrency.

dogecoin

Related Article: Coinbase Text Scam

 

4. How Do You Use Dogecoin?

As people continue to talk about and hear about Dogecoin, more and more people invest. Once you have invested in it, then what? As Doge becomes more popular, there are some options to use it as currency. Noted by businesspartnermagazine.com, Paypal will assist in Checkout with cryptocurrency shortly, which will allow users to use this form of payment.

Apparently, many other platforms that soon will enable Dogecoin payments, but until we get to that point, well, it’s not yet possible.

5. Is It Safe To Invest In Dogecoin?

This is the question on everyone’s mind. Like most investments, you can’t make money if you don’t’ spend money, and if you don’t want to lose a lot, don’t invest a lot. With so much speculation on Dogecoin, yes, the value has indeed grown in the last few weeks.

The big question is this only because of the backing of Elon Musk and other loyal followers? Maybe. Although the Dogecoin community is vast and varied, the cryptocurrency has a supportive network of people throughout the world that have supported such fun things as the Jamaican bobsled team in 2014.

There is no guarantee with investments – if you are going to add to the growing hype of Dogecoin, you may be able to find value in the investment.

However, commons scams these days involve the creation of fake Dogecoin websites. The good news is that you can see if a website is legit or not by using the Scam Detector’s website validator. Check it out below:

6. Will Dogecoin Crash?

Another popular question is, will Dogecoin crash? With so much speculation, there is a lot of conversation if there is even a reason to invest in Dogecoin. Along with this growing conversation has come growing investment, and as Elon Musk engages social media in ongoing chatter, the price and value continue to grow. With continued growth, there can also be a crash, but is there a way to predict what will happen?

A recent article by the Wall Street Journal talked about the early speculation with several types of cryptocurrency, including Dogecoin. As noted, Dogecoin, in the last several months, has exploded with growth, but as discussed in their article “If Crypto Crashes, Tomorrow, It’s No Big Deal. In Five Years, it Might Be” by Justin Lahart, cryptocurrency has become increasingly popular, but it is difficult to predict what will happen in the future.

In general, it was noted that crashes could happen with any currency, and when financial staples crash, people spend less money, impacting the financial markets everywhere.

“Here is why it will certainly crash”, says Jiulin Teng. “This is 1920s Wall Street pump & dump all over again, with regulators as lenient as they were back then. In crypto alone, each time, we see an 80-90% drop in Bitcoin prices, while altcoins see 90-100% declines across the board. The craziest pump happens in the last two months when Bitcoin stops growing. This is when all the fraudsters come out and take more and more risks. Since few in crypto have ever seen a prison cell, they are just more emboldened this time.”

7. Will Dogecoin Become Common Currency?

Although speculation runs rampant, there is still no clear picture on whether or not Dogecoin, or other forms of cryptocurrency, will ever be the preferred type of currency in the world. There are complicating matters, including availability to all for online trading and useability, that could impact this type of currency.

Another side of the virtual coin is that currently, there are over $2 trillion different currencies; a crash of one cryptocurrency may not be felt by those other than the ones holding that specific type of coin.

On the other hand, Mark Grabowski, Associate Professor at Adelphi University, is convinced that DOGE is just water under the bridge. “As a parody coin, it serves no particular purpose, brings no technological advancements, and solves no real-world problem – no offense to DOGE owners!”.

He adds: “It has not been updated in several years, making it a dead project, yet it somehow has a market cap of nearly $80 billion. DOGE’s value is entirely derived from supply and demand and people’s perception of its price. It’s not useful for anything other than trading, and you can’t even hold it in your hand or look at it since cryptocurrencies only exist as code in cyberspace.”

“In short, it’s a huge scam, and Dogecoin’s price will eventually come crashing down. Those who didn’t own it until very recently, and mostly invested because number go up, will get wrecked. “, says Grabowski.

cryptocurrency

8. Is the Dogecoin Hype a Scam or a True Investment Opportunity?

It may be a bit tough to parcel out whether or not investing in Dogecoin is a smart investment. The niche is so new that you cannot even refer to people with some experience as ‘specialists’, which is the reason there is a lot of room for fraud as new horizons/tech/trailblazers appear.

Because of the current hype, many are choosing to face some risk to invest. When those with large sums of money are willing to promote and invest in currency, it is easy to be swayed into falling into the trap of investing money as well.

Depending on your view, a quick money-making opportunity may feel like an amazing choice to grow wealth within your portfolio – those that are not willing to risk money to invest will find the current Dogecoin opportunity a bogus scam perpetrated by folks that have the deepest pockets.

You can watch the market value move quickly throughout the day, vying for the best time to trade or purchase more or trade and sell, but there is no crystal ball that can predict where the Dogecoin market will go.

If you feel that any variable investment is too big a risk, then the current market explosion for cryptocurrency may be viewed as a scam. Otherwise, investing in a high-risk volatile market trend is here to stay and currently is named Dogecoin.

9. Beware of Fake Dogecoin Websites

As mentioned above, one of the common trends when it comes to Dogecoin scams is the presence of more and more bogus cryptocurrency websites.

“Research the company’s founders before buying the Dogecoin. Ensure they’re recognized and legitimate – if there’s no ‘About Us’ on a company’s website, that’s a huge red flag. Instead, buy from a reputable site like Robinhood or Coinbase. Although Dogecoin itself is risky, you can avoid a scam by using a site that’s been vetted by other customers.”, says Grant Aldrich from OnlineDegree.com.

Even a joke website called snl-doge.org came out this morning before the Saturday Night Live got on.

10. Overhyped Asset Tag

It seems like the common definition of Dogecoin amongst the crypto enthusiasts is that it’s an ‘overhyped asset’. What does that mean, more specifically?

“I wouldn’t call it a scam but rather an overhyped asset.”, says John Frigo, from BestPriceNutrition.com. “Why? Well, it’s easy to buy, i.e., Robinhood and mainstream exchanges trade it, whereas a coin like BNB Coin, for example, only Binance trades it, so your just not going to get as much money or all the noobs pouring into it.”

“Also the Elon Musk, Mark Cuban, and the media are really pumping it and hyping it up as well. It’s essentially the same thing that happened to stocks like AMC, Nokia, and Gamestop when WallStreetBets got into them. If people decide something has value, it does.”

11. DYOR = Do Your Own Research

“According to CoinTelegraph, in 2017-2018, up to 92% of all crypto projects were scams or ended in bankruptcy, and that was during the first publicized crypto bull run. Now that crypto prices – and crypto media coverage – have exponentially increased, so have the scams”, says Jeremy Britton from BostonTrading.co.

However, three years ago means several decades in crypto-years, as Britton puts it.

“Considering that anyone with a spare few minutes – and a spare few hundred dollars – can create a coin, it is little wonder that there are so many scams in the crypto sphere. Would you trust a fourth-grader with your money?”

“Currently, there are thousands of dead coins and thousands more that have crashed, taking investors’ money down to zero. Coins that have no use case, no purpose, or highly-concentrated holdings can be signs of a scam. A quick check will show that around 75% of DOGE, for example, is held by a little over 100 people. This means that one or two sellers could collapse the entire DOGE market, something which is impossible with the far more widely-held bitcoin, Ethereum, and XRP.”

“It only takes a few seconds to check the names of the coin creators on LinkedIn for legitimacy or to discover if they have more than a handful of followers on Twitter. Yes, it is wise to look at peer-reviewed sites such as Twitter and LinkedIn, and avoid unpoliced sites such as TikTok and Redditt, where any person can make any claim without evidence.”

“For those investors who are too busy to DYOR (Do Your Own Research), you may elect to invest with a secure fund manager. When up to 92% of coins may be scams, it’s not just a jungle out there; it’s a minefield. Stay safe and use common sense, not TikTok.”

12. Celebrities in Trouble

Britton goes ahead with his strong opinion about DOGE.

“Sadly, it has been shown that we cannot trust celebrities either, as many famous people have been paid to promote worthless scam coins, and some of them have even faced criminal charges. Paris Hilton with Lydian coin, Steven Seagal with bitcoiin (with two ii’s), Floyd Mayweather with Centra and Hubi, Wu-Tang Clan with CREAM, and Gwyneth Paltrow with Abra are just some of the real celebrities who promoted failed coins. We wish we did not have to say it, but thousands of scams use celebrity photos illegally, without the knowledge of the celebrity. These ads are 100% illegal, immoral and 100% guaranteed to lose all your money.”, says Britton.

13. What Experienced Crypto Users Say

When it comes to those who have been in the industry for a while, we received mostly negative opinions about Dogecoin.

“Is Dogecoin a scam? It all depends on the hill you want to die on”, says Patrick Moore from CryptoWhat.com. “Dogecoin fans would swear by its validity. After all, the dogecoin price is going up and up every other day.”

“However, as a cryptocurrency expert, I have to say that Dogecoin is essentially a joke coin. The rise in dogecoin prices is not attributable to an increase in volume- and there goes the whole drain. This is the ultimate red flag for any crypto coin in the market. Whenever one goes into a market, you have to really reflect on the basis of the market- and Dogecoin lacks that in all its entirety.”

“The biggest red flag about Dogecoin is its history, which is checkered with cons, scams, and pump and dump schemes.  One has to remember that Dogecoin hasn’t drawn value from any trades- it’s just the hype, a typical strategy for pump and dump schemes. Pump and dump schemes have been around for as long as cryptocurrencies have existed. With Dogecoin, it’s just a matter of old schemes being perpetuated in a new way.”

“The Dogecoin Bubble Is Unlikely To Last”

Moore continues: “It was never meant as a tradeable unit. However, the pump and dump bandwagon pushed it to new heights in 2016. ”

“Dogecoin’s scam portfolio reeks of the same old new tricks. Quite often, a cryptocurrency scam would be catalyzed by fake stories, celebrity endorsements, and a lot of hype, with no tangible trade beneath the coin. Sounds any different? You bet it doesn’t. The dogecoin story has gone by the same book.”

“Even though it sounds like the best get-rich in weeks type of idea, the dogecoin bubble is highly unlikely to last a few months. The same thing was tried with bitcoin- it didn’t last. Gullible investors who jump into the wagon without verifying may just wave their investments goodbye- because the dogecoin joke is likely to waft away with their investments.”

What’s your take? Let us know below!

How To Report a DOGE Scammer

First, let your family and online friends know about this Dogecoin article on social media. Secondly, you can officially report scammers and any other suspicious crypto activity to the Federal Trade Commission (FTC) using this link below:

Report To The FTC Here

How To Protect Yourself More

If you want to receive by email the most prevalent scams weekly, please subscribe to the Scam Detector newsletter here.  Meanwhile, educate yourself with some other crypto fraud-related articles – listed right under this paragraph – so that you know how to stay safe online. Last but not least, use the comments section below to expose other cryptocurrency scammers.

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selma hrynchuk
Selma HrynchukSelma is a fraud prevention specialist renowned for her expertise in private eye investigations and a remarkable partnership with law enforcement agencies. Beyond her investigative triumphs, her public speaking engagements and written works have empowered countless individuals to protect themselves and stay ahead of deceptive schemes. Selma's legacy shines as a tenacious agent of change, unyielding in her commitment to battling fraud and ensuring a safer world for all.

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