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Dogecoin sees major Doge Day spike. Should you still invest?

Dogecoin had a wild week that resulted in a quick rise to a steep drop within the course of a couple of hours, and now questions exist as to what investors will do next.

Dogecoin rise

CNN reported that Dogecoin jumped 20% on Tuesday as cryptocurrency fans celebrated Doge Day.

  • The cryptocurrency amassed a total worth of $53 billion, raising the price of a single coin to $0.42.
  • For a currency that had a worth of $0.0023 cents in 2020, that’s a massive climb.

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The rise made Dogecoin the fifth most valuable cryptocurrency in the entire world, according to CNN.

  • Demand for the cryptocurrency ended up creating issues for the app Robinhood, which allows people to sell and trade cryptocurrencies and stocks.

Dogecoin fall

But Dogecoin’s hype was somewhat short-lived this week. As Yahoo! Finance reports, the cryptocurrency dropped 22% down to $0.32 and then later to $0.30.

  • The drop came as investors tried to push its value to $1.

So why the drop? Eric Schiffer, chief of private equity firm The Patriarch Organization, told Yahoo Finance that people were worried about investing in something that doesn’t have major value.

“There was anxiety with larger investors who had big positions that the dog had its day coming and wanted to exit. Keep in mind there is zero intrinsic value — the current valuation even at the pullback is still totally insane,” Schiffer said.

Should you invest in Dogecoin?

According to Benzinga, potential investors need to keep an eye on what’s happening.

  • “As with all investments, due diligence is the key. Investors should consider the demand and supply of a coin, its market capitalization, use cases, underlying technology, and most of all their risk appetite before investing in any cryptocurrency. In short, it is not worth buying any cryptocurrency simply because it trades at a low price,” according to Benzinga.