Well, apparently it is worth a nickel. When I wrote I thought it was worth more than a penny, I felt like a nickel was a likely value by the end of the year. Now, here we are just February and doge is worth a nickel already!
It has been over a dime since New Year's Day a few times. There seems to be some resistance there around a dime. Selling begins and dogecoin stairsteps its way down. However, this nickel floor has been almost as firm as the dime ceiling over the last month. This is why I figure it's OK to consider it worth a nickel. Crypto is SO volatile, there is no actual set value in your head. It is almost like monetary string theory. The value at any given moment is a mystic blend of inductive reasoning coupled with a rather fluid moving average you keep in your head.
We have to be honest, nobody has the foggiest idea what is going to happen next. Doge could be "trading" for a quarter by St. Patrick's Day. We will all look back with regret and hindsight about how we should have seen it coming.
Frankly, I feel the pandemic and America's response have combined to be more than a Black Swan event. This perfect storm is more like a Black Pterodactyl. The money printing by the central banks all across the globe has been epic. The United States injected a stimulus of 30% of GNP last year. If Biden gets everything he asks for, the stimulus will be almost half of the projected GNP for this year.
That means the economy is running on central bank rocket fuel. The central government seems determined to use all the rocket fuel it can get. Keynesian economics says this could be a good thing, but only if the money truly makes it into infrastructure or other real and tangible things to improve America.
It was against this backdrop that I made the case for doge worth more than a penny. I made a strong case for dogecoin actually being fairly practical with a built-in cap on inflation at about 5%. The alleged weakness of no actual coin cap allowed for growth and flexibility going forward. These are good traits for the possible adoption of a cryptocurrency in regular life.
These positives remain. There is also Elon giving the cryptocurrency so much attention on his Twitter account. Yet these are not really hard economic facts and figures. No one has such things after a Black Pterodactyl event.
Investors of all experience levels must be struggling. Unprecedented was the most overused word of 2020, but that was because it was true. We just got tired of hearing it. Even if you try to stick to normal investing strategies, you are faced with near negative interest rates.
Along with central bank interventions creating price-insensitive buyers in the stock market, there are political machinations afoot as well in the markets. Xiaomi was a perfectly good investment until the US government accused it of close ties with the Chinese military.
With moves like this, one has to wonder about insider trading. Quite a number of politicians were caught red-handed last year, yet no real action has been taken against them. Who knew Xiaomi was about to become a bad investment? If you did you could have made a killing.
Xiaomi is just the most recent example of political shenanigans causing particular stocks to move up and down wildly. In any case, these are the reasons why younger people are looking at dogecoin. Elon is saying doge is cool and he has an interest in it.
The fact of the matter is young people can make doge worth a dime. Elon knows this quite well. What are Elon's plans for doge? Nobody knows, but young people trust Elon Musk more than they trust Jerome Powell, Joe Biden, or Donald Trump.
Elon certainly seems to be laying the groundwork for SOMETHING. Tweeting about paying for the DogeWhales to close their hands. Doge is still too concentrated according to Elon. Does Elon have the power to go to the Clubhouse and talk Whales into doing stuff? I do not know, but I think young people think he does.
Hell, I only got involved in dogecoin because my doggie recommended it. I was talking to her and she said, "All things doggie are good. How can Doggie Coin be bad? You should put some money in." Woof!
Disclaimer: The opinions in this article belong to the author alone. Nothing in this article constitutes investment advice. Please conduct your own thorough research before making any investment decisions.