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Here are 4 reasons to sell Dogecoin, and why you might keep it

Are you still holding on to your Dogecoins? You might sell your Dogecoin for a few reasons, but there are also fewer reasons to keep it.

Dogecoin, the 2021’s most popular meme coin, saw its price soar by approximately 216% in January 2021. The rise didn’t end there. Dogecoin rose, reaching an all-time high of $1,047 in April. Investors, many inspired and motivated by Tesla CEO Elon Musk’s, raced to purchase the coin.

Many investors have wondered, “Should my Dogecoin be sold?”. Dogecoin has had its ups and downs. We’ve put together this list to assist you in making your decision.

1. You have made a decent profit

Different people will define a decent profit in different ways. If you have doubled, tripled or quadrupled the amount of your initial investment, this is a good indicator to use when deciding whether to sell Dogecoin. Due to Dogecoin’s volatility you might consider cashing out approximately 50% of your holdings if you have already made a substantial profit.

Cashing out will allow you to pay capital gains taxes and provide a substantial return on your initial investment. Your remaining Dogecoin assets can be sold for pure profit. Even if Dogecoin falls in value, you don’t lose any of your initial capital.

You can always move funds back into Dogecoin once the market settles. Keep in mind, however, that the volatility of the crypto market makes it difficult to predict the future performance of any coin. There is always the possibility that your Dogecoin investment could be lost.

RELATED: Why Elon Musk Made The Dogecoin Price Go Up

2. Dogecoin is a speculative asset

Dogecoin is not the only cryptocurrency that allows for speculation. All cryptocurrencies can be considered volatile and highly speculative investments. Dogecoin’s novelty was the reason for its viral success, but it is not known if the coin has any real-world utility.

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Dogecoin is often bought without taking into account its fundamentals, in the hope that they can sell it to an investor for a higher price. These speculative moves make Dogecoin less reliable as a store of value.

Bitcoin, on the other hand, has enjoyed social trust over time and enjoys a competitive advantage. Dogecoin, unlike Ethereum and Cardano is not programmable. Users can’t create decentralized applications using its blockchain.

3. Dogecoin lacks real-world utility

Dogecoin’s early investors have made handsome profits, but there aren’t many real-world applications for the coin. Dogecoin was created by its founders as a payment system. The token has not been widely used for this purpose.

According to the Cryptwerk online directory, only a few thousand merchants accept Dogecoin. This is a small percentage considering the number of small businesses in the U.S.

4. Dogecoin’s supply is unlimited

Bitcoin is unique because it has a finite supply of 21 million coins. Many alt-coins are following in the footsteps of Bitcoin by setting a hard limit on how many coins can ever be made.

Dogecoin, on the other hand, has an inexhaustible supply which makes it inflationary and unreliable as a long-term value store. The coin’s value is affected by how many Dogecoins are in circulation.

Why not stick with Dogecoin?

Dogecoin has limited real-world applications and inflationary as we mentioned. Dogecoin’s adoption as a payment method has been limited over the past year. But that could be changing.

 

There won’t be more Bitcoin to mine after 2140. Dogecoin’s supply, on the other hand, was set to grow at an absolute rate. This ensures a steady increase over time. Once mined, the supply of Dogecoins rises at an average of 5 billion per annum.

RELATED: How to Buy Dogecoin (And The Precautions You Should Take)

Although the number of Dogecoins could increase indefinitely, it will likely hit a practical limit. Because the growth of the coin is predictable, it makes it easier to use as currency to purchase goods and services. Dogecoin may be worth keeping because of its potential acceptance by many people in the future.

    

This is not all. Dogecoin will move from proof-of-work (PoW), to proof-of-stake (PoS), in order to reduce its energy consumption and improve transaction speeds. Dogecoin relied on PoW until now to validate transactions.

Dogecoin owners would benefit from the PoS shift. PoS will allow anyone with the coin to verify transactions. As compensation, Dogecoin owners would receive a fixed percentage from the pledged assets each time a block is added to blockchain. If you have Dogecoin, you might want to keep it for the eventuality of PoS.

Remember to consider the tax implications before selling Dogecoin, or any other crypto. Your positions in Dogecoin are equal to unrealized gains and losses. A substantial tax bill could result if you sell the coin. It’s crucial to have enough money in reserve to pay these taxes when you file.

Do I need to sell my dogecoin?

Dogecoin’s sale is an individual decision that you make based on your particular circumstances. There are many reasons to dispose of the meme coin. However, there are several reasons to keep it. Due to the volatility of Dogecoin, and other cryptocurrencies in general it is best to only invest the money that you can afford to loose and to always do as much research before you make any investment.

 

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