Your guide to dogecoin trading

Dogecoin (DOGE) was created in 2013 by software engineers Billy Markus and Jackson Palmer, neither of whom are still affiliated with the project. The coin was inspired by the popular 2010 meme of a Shiba Inu dog called Doge, and was originally started as a joke. It was the first memecoin, and has inspired the creation of hundreds of others.

Dogecoin is an open-source, decentralised, peer-to-peer cryptocurrency, which “sets itself apart from other digital currencies with an amazing, vibrant community made up of friendly folks”.

The coin’s protocol was based on the now-defunct Luckycoin, a spinoff of Litecoin (LTC), an early altcoin. According to Palmer, this protocol was used as means to turn potential miners away from the project with the aim of making it fail. However, that did not go as planned and Luckycoin was removed from DOGE’s protocol since it was causing a number of problems. 

In 2014, a Dogecoin Foundation was established by the project’s creators that aims to provide support, advocacy, trademark protection and governance for the DOGE cryptocurrency project.

Over 132 billion DOGE coins are currently (28 April) in circulation according to data provided by CoinMarketCap. The dogecoin supply is unlimited, and since reaching the 100 billion coins mark in 2015 each subsequently mined DOGE block produces 10,000 new coins, increasing the cryptocurrency’s supply and encouraging miners to continue to secure the network. 

DOGE has a market capitalisation of over $18bn and is ranked as the 10th most popular cryptocurrency, as of 28 April, surpassing Shiba Inu (SHIB), the self-proclaimed “Dogecoin killer”.  

Why is DOGE important to traders and investors?

The dogecoin cryptocurrency can also be “easily sent through the internet” from person to person with total security and fast transaction speeds. DOGE is also accepted as a payment method at a number of online retailers, groceries and as donations for charities.  

According to Invezz’s data analyst, Dan Ashmore, DOGE became a cultural phenomenon. 

“Investors believe they are joining a warm and welcoming community; a fun and exciting group on the precipice of the crypto frontier,” he told Capital.com. 

“There is a sense of loyalty, jovial togetherness and amusement about the whole thing. Most investors have no knowledge or vested interest in the underlying fundamentals of the asset - if there are any fundamentals to begin with,” he added.

Note that due to the nature of memecoins, dogecoin is an extremely high-risk asset. Cryptocurrency markets are volatile, meaning their prices constantly fluctuate and it’s hard to predict the coin’s future movement. With so many factors at play, we encourage you to always conduct due diligence before trading and never trade money you cannot afford to lose. 

DOGE price drivers

Dogecoin price history: Major swings

Even though the token managed to surpass the $0.3 dip by 13 May 2021, the downtrend continued to reduce the dogecoin value over time. Peaks coincided with endorsements from Musk. 

Being unable to reach May 2021 highs again, the dogecoin value in USD managed to peak once again at the start of June 2021. The coin recorded an over 30% daily gain after popular crypto exchange Coinbase announced that it would list it on the platform from 2 June 2021. The cryptocurrency is also available in Binance, where users can earn dogecoin by staking. 

Over the following months, the dogecoin exchange rate continued to surge on endorsements from Musk, however, with significant fluctuations. Unlike coins like Bitcoin (BTC), whose maximum supply is halved every four years, dogecoins are unlimited, making them prone to inflation. 

After decreasing by over 65% between August 2021 and March 2022, the dogecoin worth was boosted yet again amid the recent announcement that Musk is purchasing Twitter. 

Following news that Twitter’s board had agreed to Musk’s buyout deal on 25 April 2022, the dogecoin rate jumped to $0.158.

Dogecoin future

The future of Dogecoin is difficult to predict, as the cryptocurrency’s price and dogecoin’s potential is highly dependent on whether dog-themed coins remain popular.

While Dogecoin's community could be one of the top driving points in determining whether the token enjoys successful performance, celebrity endorsement, especially from Musk, are also vital for its future. 

“Doge is a meme, so price drivers can often be something as frivolous as a celebrity purchase, a silly tweet or something of that ilk,” Invezz’s Ashmore told Capital.com. 

“The bonus on top, for long-term price drivers, is if merchants start accepting dogecoin as payment and it generates actual utility via that route.”

On 14 January 2022, Musk announced that Tesla started accepting DOGE as a payment method for purchasing Tesla merchandise, boosting the token’s price by over 21% in four days.

The move was followed by AMC Entertainment’s acceptance of DOGE and SHIB in April 2022. The dogecoin Foundation released a roadmap underlining a number of features and projects that will be arriving to the blockchain, including the launch of a dogecoin Keyring App and a revamp of the Dogecoin.com website. 

How to trade dogecoin

CFDs are typically held within shorter timeframes, so could be useful if you’re looking to trade dogecoin for a short period of time rather than as a long-term addition to your portfolio.

The advantage of using CFDs for trading dogecoin is that you can profit from your position whether the price of the asset rises or falls. You can take a long position if you expect the price to rise, or you can open a short position if you expect the price to fall.

Note that all trading contains risk, and cryptocurrency markets are extremely volatile. Always conduct your own due diligence before deciding to trade or invest in Dogecoin. Consider the cryptocurrency’s technicals and fundamentals. And never trade money you cannot afford to lose. 

Why trade DOFE CFDs with Capital.com?

Advanced AI technology at its core: A personalised news feed provides users with unique content based on their preferences. The neural network analyses in-app behaviour and suggests videos and articles that fit your investment strategy.

Trading on margin: Providing trading on margin (up to 1:2 for cryptocurrencies), Capital.com gives you access to a wide range of popular cryptos, including the memecoin DOGE, without requiring a large amount of funds in your account.

Trading the difference: When trading CFDs on cryptocurrency like dogecoin, you don’t buy the underlying asset itself, meaning you are not tied to it. You only speculate on the rise or fall of its price. When trading CFDs you can go short or long and set stop and limit losses. CFD trading is similar to traditional trading in terms of its associated strategies. However, CFD trading is short term in nature, due to overnight charges.

All-round trading analysis: The browser-based platform allows traders to shape their own market analysis and forecasts with sleek technical indicators. Capital.com provides live market updates and various chart formats, available on desktop, iOS and Android.

Focus on safety: Capital.com is authorised and regulated by the CySEC, ASIC and NBRB. Your client data is protected at all times and your funds are securely kept in segregated bank accounts, which you can withdraw 24/7.

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