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How to Buy Elon Musk’s Favorite Cryptocurrency Dogecoin

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.

How to Buy Elon Musk’s Favorite Cryptocurrency Dogecoin

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.

Introduction to Buying Dogecoin

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:

  • Where to buy DOGE coins

  • How to set up a Dogecoin wallet to store your coins

  • What gas fees you need to take into account

  • How much Dogecoin you should consider buying

  • Best practices for keeping your coins safe and secure

  • Whether DOGE is a smart investment

  • How to sell DOGE when you’re ready

  • The tax obligations of owning cryptocurrency

Let’s get started with the best places to buy Dogecoin.

Where 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:

  • Binance – The world’s largest crypto exchange with over 500 trading pairs. Dogecoin can be traded against Tether, Bitcoin, Binance Coin and others.

  • Coinbase – A U.S. regulated exchange where you can buy Doge with fiat currencies like USD.

  • Kraken – A reputable exchange with high liquidity and options for staking Dogecoin.

  • KuCoin – A popular exchange supporting Dogecoin margin trading.

To buy Dogecoin on these platforms, you’ll need to:

  1. Sign up for an account and verify your identity.

  2. Deposit funds via bank transfer, debit card, or crypto deposit.

  3. Navigate to the DOGE trading pair you want.

  4. Place a buy order for the amount of Dogecoin you want.

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.

Setting Up a Cryptocurrency Wallet

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:

  • Hot wallets – Software wallets connected to the internet like Exodus, Atomic Wallet, etc. More convenient but less secure.

  • Cold wallets – Wallets not connected to the internet like Ledger and Trezor hardware wallets. Maximum security but less convenient.

  • Paper wallets – A printed public and private key. Relatively secure but can be physically damaged.

  • Mobile wallets – Wallets integrated into a smartphone. Great for everyday payments but have risks if phone is lost/hacked.

For buying and holding Dogecoin, a hot wallet like Exodus or Coinomi is a solid choice. Here are the steps to set one up:

  1. Download and install the wallet software on your computer/mobile device.

  2. Follow the setup process, making sure to carefully note down your private recovery phrase. This phrase can restore your wallet if anything happens.

  3. Once your wallet is ready, find and click the “Receive” button for Dogecoin. This will display your Dogecoin public address.

  4. Copy your public Dogecoin address to share with crypto exchanges when withdrawing DOGE to your wallet.

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.

Understanding Cryptocurrency 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:

  • Use centralized exchanges whenever possible – no gas fees for trades!

  • Transfer larger amounts at once rather than multiple small transfers.

  • Try waiting for periods of lower network congestion when gas prices drop.

  • Adjust transactions speeds – slower confirmations mean lower fees.

  • Claim airdrops and crypto faucets to cover initial gas costs.

Understanding gas will help you budget and minimize unnecessary fees. Next let’s discuss how much Dogecoin you should consider buying.

How Much Dogecoin to Buy

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:

  • Only allocate 1-5% of your portfolio to a risky asset like DOGE.

  • Dollar-cost average rather than buying all at once. For example, invest $100 per month.

  • Have an exit strategy and stick to stop-losses. Don’t let emotions override rational targets.

  • Ignore social media hype and “get rich quick” mentality. Temper expectations.

  • Assess your personal risk tolerance. Cryptocurrency volatility is not suitable for all investors.

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.

Storing Your Dogecoin

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:

  • Public key – Like your bank account number. You share your public key to receive coins from others.

  • Private key – Like the PIN number for your bank account. You use your private key to access your wallet and sign transactions.

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:

  • Backup your wallet in multiple locations in case of hardware failure.

  • Safely store your private key and recovery phrase. Consider encryption. Don’t just save them in a document on your computer!

  • Test recovering your wallet from the backup to ensure it works when needed.

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.

Is Dogecoin 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:

  • Extremely wide brand recognition and appeal thanks to Doge memes and Elon Musk promotion

  • Large and active community. Dogecoin Reddit has 2+ million members.

  • Relative stability in 2022 compared to other meme coins indicates lasting power.

  • Could gain further mainstream adoption for payments. Some businesses already accept DOGE.

  • Low nominal price draws new investors who want to own many coins.

The Bear Case Against Dogecoin:

  • No unique value proposition from a technology perspective. Dogecoin is based on Litecoin.

  • Almost no institutional investment or support compared to Bitcoin and Ethereum.

  • High inflation schedule prints billions of new DOGE every year, diluting coin value.

  • No active development. Network development is basically abandoned.

  • Purely speculative asset with no fundamental underpinings besides marketing.

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.

How to Sell or Trade Your Dogecoin

Selling or trading your DOGE is as simple as reversing the process you used to buy the coins:

  1. Send your Dogecoin from your wallet back to your account on the exchange.

  2. Navigate to the DOGE trading pair you wish to sell on.

  3. Place a sell order for your Dogecoin at a price of your choosing.

  4. Withdraw the cash proceeds to your bank account.

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.

Tax Implications of Owning Cryptocurrency

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:

  • If held for under one year before selling, profit is taxed as short-term capital gains. Your normal income rate applies.

  • If held for over one year before selling, profit is taxed as long-term gains at preferential rates.

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:

  • Use a crypto tax software like CoinTracker to generate your required capital gains tax reports.

  • Consult a knowledgeable CPA if you have questions. Crypto tax rules can be complex.

  • Keep detailed records of all your purchase dates and costs paid.

  • Set aside a portion of profits to cover estimated capital gains tax.

  • Never attempt to hide or lie about crypto earnings – the IRS is cracking down.

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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