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Learn how to buy Elon Musk’s new cryptocurrency, including where to purchase it, setting up a crypto wallet, understanding gas fees, and tips for responsible investing.
Have you heard about the cryptocurrency Dogecoin and how Elon Musk can’t stop tweeting about it? Launched in 2013 as a joke, Dogecoin has skyrocketed in popularity thanks to endorsements from the world’s richest man.
In this comprehensive guide, you’ll learn everything you need to know to buy Dogecoin and start trading the viral meme coin yourself.
Dogecoin (DOGE) is a cryptocurrency that was created in 2013 based on the popular Doge meme. What started as a joke has turned into one of the largest cryptocurrencies on the market thanks to vocal support from Tesla CEO Elon Musk and a frenzied rally driven by Reddit traders in 2021.
Dogecoin now has a market capitalization of over $11 billion and is accepted by a growing number of merchants and services. For cryptocurrency investors and traders, Dogecoin presents an opportunity to profit from the massive hype surrounding this digital asset.
But how exactly can you get exposure to Dogecoin? In this guide, we’ll walk through everything you need to know step-by-step, including:
Let’s get started with the best places to buy Dogecoin.
Unlike newer cryptocurrencies, purchasing Dogecoin is relatively straightforward thanks to its listing on several major exchanges. Here are some of the most popular places you can buy DOGE coins.
Major Cryptocurrency Exchanges
The easiest way to buy Dogecoin is on a centralized cryptocurrency exchange like:
To buy Dogecoin on these platforms, you’ll need to:
The main advantage of centralized exchanges is that they are beginner friendly. The downside is you don’t have direct custody of your coins.
Decentralized Exchanges
Decentralized exchanges like Uniswap and PancakeSwap also list Dogecoin. You can trade DOGE directly from your cryptocurrency wallet on these platforms without registration.
However, decentralized exchange trading can be complex for cryptocurrency beginners. You’ll also need to pay higher gas fees on transactions.
It’s generally better to use centralized platforms when first starting out. Once you have a solid understanding of how to buy and manage your crypto, you can explore decentralized exchange options.
Now let’s go over how to set up a Dogecoin wallet so you have a place to securely store your newly purchased coins.
A cryptocurrency wallet is a software program or physical device that allows you to receive, store, and transfer coins like Dogecoin. Your wallet also interfaces with blockchains to broadcast transactions.
Here are the main types of crypto wallets:
For buying and holding Dogecoin, a hot wallet like Exodus or Coinomi is a solid choice. Here are the steps to set one up:
Be sure not to lose or share your private key or recovery phrase! Now let’s discuss an important factor when making crypto transactions – gas fees.
When buying, selling, or transferring cryptocurrency like Dogecoin, you’ll encounter an additional cost called a “gas fee.”
What are Gas Fees?
On blockchains like Ethereum, gas fees are payments made to compensate the miners confirming and processing transactions. Each transaction requires computational work, so gas fees incentivize miners to prioritize transactions with higher fees attached.
The amount of gas required depends on the complexity of the transaction. Sending coins between wallets is simpler and cheaper than trading on a decentralized exchange, for example. Gas prices also fluctuate dynamically based on the volume of transactions on the network.
Tips for Minimizing Gas Fees
Here are some tips for reducing gas fees when purchasing and moving your Dogecoin:
Understanding gas will help you budget and minimize unnecessary fees. Next let’s discuss how much Dogecoin you should consider buying.
With hype surrounding Dogecoin, you may feel tempted to buy a large position. But it’s important to evaluate the opportunity responsibly, just as with any investment.
Current Price and Market Cap
As of December 2022, the price of DOGE is around $0.07 with a market cap of $11 billion. Dogecoin reached an all-time high of $0.73 in May 2021 fueled by a viral push on Reddit.
The current price remains moderately high relative to past years, indicating there is still substantial interest. However, the massive 2021 rally has subsided significantly.
Investing Responsibly
Here are some tips for investing wisely:
The days of 100x gains from Dogecoin are likely over. With prudent position sizing, Dollar-cost averaging, and measured expectations, you can responsibly gain exposure to Dogecoin and the enthusiasm surrounding this unique cryptocurrency.
Now let’s look at best practices for keeping your DOGE investment secure.
Once you’ve purchased Dogecoin, you need to keep it safe and secure in your wallet. As a crypto owner, you have complete responsibility for your assets.
Public and Private Keys
Your Dogecoin wallet contains:
Anyone with your private key has complete control over your coins. Never share your private key!
Wallet Backup and Recovery
Because you have sole responsibility for your crypto assets, it’s essential to:
Take wallet security seriously! With sound backup procedures and robust encryption, you can store your Dogecoin safely for the long-term.
Now that you know how to buy and store Dogecoin, let’s examine whether it makes for a good investment.
The meteoric rise of Dogecoin has led many to wonder whether it’s worth investing in. There are reasonable arguments on both sides:
The Bull Case for Dogecoin:
The Bear Case Against Dogecoin:
As with any cryptocurrency, there are substantial risks attached to the investment thesis. Do your own due diligence on the fundamentals before deciding if Dogecoin has a place in your portfolio.
Now let’s go over how to sell DOGE when you’re ready to take profit or rebalance your crypto allocation.
Selling or trading your DOGE is as simple as reversing the process you used to buy the coins:
You can also trade your DOGE for other cryptocurrencies like Bitcoin rather than converting back to fiat currency.
When selling Dogecoin, you have two main order options:
Market order – sell your DOGE at current market prices. Fast but you may lose out on upside if the price moves up right after.
Limit order – set a minimum price threshold for your sell order. It will only execute if the limit price is reached.
Due to high volatility, we recommend using limit orders and being patient for your desired price rather than market dumping. Avoid panic selling due to volatility as well.
Now that you know how to buy and sell Dogecoin, let’s discuss some important tax considerations.
If you sell or trade your DOGE for a profit, you will incur capital gains taxes.
Cryptocurrency Capital Gains Tax
In the U.S., cryptocurrency is treated as property by the IRS. Like stocks:
You owe taxes on any gains realized above your cost basis when you acquired the crypto.
Reporting Tools and Advice
To prepare for tax time:
Following the tax rules is vital for staying on the right side of the law as a cryptocurrency investor.
And that covers the essentials of how to buy Dogecoin! By following this guide you can gain exposure to this popular meme coin in a responsible and secure manner while avoiding costly mistakes.
As the cryptocurrency market matures, there will be ever more opportunities like Dogecoin for the savvy investor. So start small, build your knowledge, and get ready to capitalize on the crypto revolution!
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