APRIL 18 — The last few weeks has seen me make my most successful investment… ever. I am up over 600 per cent.
What did I buy? Some fantastic leveraged trade against an obscure commodity? Did I enter a structured product involving microchips, Tesla shares and palm oil? No, certainly not. I bought Dogecoin.
Yup, a crypto currency inspired by a meme that was basically created as a joke. This is my greatest ever financial investment and frankly, have you ever made 700 per cent in three weeks on an investment?
In 2013, some software developers created Dogecoin as a parody of the crypto currency frenzy that was then in its infancy.
Bitcoin and Ethereum had already entered the market though at the time they were trading at a tiny fraction of their current value.
With a design based on a photoshopped Shiba Inu puppy, the developers created a basic system that allowed billions of Dogecoins to enter circulation, be transferred between individuals and be used as a basic method of payment.
Dogecoin wasn’t backed by any sort of complicated thesis or white paper, there wasn’t a complex mining protocol, no eco system of related apps.
Its creators just wanted to prove that basically anyone could come up with a coin — highlighting the shallowness of the entire crypto market.
It was meant to poke fun of a world that saw 10x and 100x asset price increases sometimes almost overnight.
And yet ironically Dogecoin itself succeeded in becoming another rapidly inflating crypto asset.
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Then when crypto currencies tanked in 2018, Dogecoin receded into obscurity. Its price hovered at .0002 US cents — so basically worthless.
No one gave it much thought until crypto currencies started rising rapidly again in 2020.
In March 2020 a single Bitcoin could be bought for around US$5,000 (RM20,630). Today, one Bitcoin will cost you around $60,000.
That’s a more than tenfold or 1,000 per cent gain and as Bitcoin has soared, so have other smaller crypto currencies.
Some have seen spectacular gains and Dogecoin has not been left behind.
Backed by tweets from Elon Musk, the world’s most bombastic man, the price of this dubious asset has soared in recent weeks.
In March, one Dogecoin was worth 0.05 US cents but last week it breached 40 cents per Dogecoin for a brief time.
That’s almost a 700 per cent appreciation. The total capitalisation of Dogecoin at its height last week exceeded US$40 billion – more than the GDP of Cambodia and rivalling the market cap of giant companies like Swiss bank UBS.
Again behind Dogecoin there’s a movement of people, similar to the WallStreetBets movement of small traders who caused havoc trading stocks of minor US retailer Game Stop, a few weeks ago.
Lots of ordinary Joe investors with a few thousand dollars to invest started backing Dogecoin a few weeks ago. This really helped it skyrocket over the past few days; I too bought a few Dogecoins just to participate in the silliness.
I was prepared to lose every cent I put in (and I really didn’t put in that much) but at the time of writing due to the crazy appreciation, I have a not negligible sum in Dogecoin; not Lambo money but solid vacation money.
My Dogecoin can be sold on crypto exchanges for Bitcoin or crypto currencies tethered to mainstream currencies like USD. These, in turn, can be withdrawn as USD or SGD cash so it’s real money we are talking about here.
But of course I am not selling. I am HODLing as in Holding On for Dear Life. It’s a term for crypto currency investors who buy and accumulate crypto currencies but don’t sell.
When you HODL, you’re basically taking some of the assets out of circulation thus trying to shift the supply demand equation in the direction of the asset you hold.