Dogecoin Bounces Higher On A Fresh Wave Of Speculation
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"Dogecoin has bounced higher, fueled yet again by chatter across internet forums, with influencers pushing the crypto currency higher.
Dogecoin Is A Speculative Bet
As we saw with the GameStop frenzy earlier in the year, traders have once again adopted a game mentality, trying to propel the price higher using hashtags and rallying cries on internet forums.
Once again the potent mix of social media and easy access to trading in the cryptocurrency has led to heightened speculation.
Dogecoin, which began life as a joke has risen by around 450% over the past week. Although at around 40 US cents, it’s still a tiny fraction of the eye watering price of Bitcoin, it’s now among the most valuable currencies in the crypto world.
Investors should be extremely cautious about getting caught up in this herd mentality because Dogecoin is very much a speculative bet whose valuation has no reliable basis. Demand has come from traders trying to ‘game’ the system and others hoping to benefit from future price rises rather than use the coins as a means of exchange. Predicting the point at which demand subsides and prices begin to fall is very difficult, if not impossible and people risk getting their fingers seriously burnt.’’
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
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