Dogecoin enthusiasts endeavoured to reach a new record high with their favourite digital coin on Tuesday, April 20, but sadly failed to push it to the $1 price point desired. As expected, in the wake of DogeDay, the price of this cryptocurrency has plummeted, with a loss of more than 10 percent of its worth yesterday. Express.co.uk speaks to a range of financial and cryptocurrency experts about the investment potential for Dogecoin.
Dogecoin is a minor cryptocurrency which was propelled into the top 10 after it was endorsed by Tesla billionaire Elon Musk.
In the past 24 hours, the price of Dogecoin has been in freefall, plummeting after backers attempted to boost its price on Tuesday.
Now the coin is worth £0.22 ($0.31), having tumbled 5.42 percent in the past 24 hours.
The highest the digital coin has ever reached is £0.32 ($0.45).
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The long-term viability of the digital coin is debated among investment specialists.
Alex Joshi, a behavioural finance specialist at Barclays Private Bank, believes the coin is attracting a lot of attention because many see it as a “get rich quick” option.
He told Express.co.uk: “When the price of an asset rises so spectacularly, over such a short period of time (Dogecoin is up approximately 8,000 percent YTD), this can rapidly lure in others with the prospect of getting rich quick.
“When you add in rapidly growing numbers of people buying because they see everyone else buying and making extraordinary returns, speculative herding behaviour really takes off, leading to vast numbers entering the market at extremely high price levels.
“The ‘get rich quick’ mania takes hold.
“There are a few key biases that individuals exhibit repeatedly during a bubble.”
Investment potential in any stock, product, currency and more should be carefully considered before it is undertaken.
As the success of the digital coin is so community-driven, there is no official roadmap outlining the trajectory of the cryptocurrency’s lifespan.
However, many believe the journeys of Bitcoin and Etherium will provide interesting forecasting for Dogecoin.
Clarify Capital’s chief financial officer, Nishank Khanna, said: “The movement on these cryptocurrencies are tied together, so when we see an uptick in one altcoin we tend to see movement in the other.
“The upward trend of Dogecoin should continue, but not before a brief correction.
“Given its recent uptick, we can expect a correction is around the corner.”
But as with the success of those cryptocurrencies, Dogecoin could become outdated with some experts calling its success “not sustainable”.
Arnab Naskar, co-founder of digital marketplace STOKR, reiterated the importance of considering Dogecoin as a meme-based cryptocurrency when thinking of its future status.
The expert said: “DOGE’s rally is not sustainable since it’s not based on any fundamentals.
“We may well see the current trend continue for a bit longer, and I wouldn’t be surprised to see DOGE reach 80 cents or even a dollar, but eventually, it will come back down, and people will get burnt.”