Baby Doge has now joined the Dogecoin bandwagon, thanks to an Elon Musk, list of small and seemingly insignificant cryptocurrencies that have suddenly increased in value. The latter took to Twitter yesterday and posted a post on the song Baby Shark – with the Baby Doge theme topped off. This has sent the price of the Baby Doge cryptocurrency on its biggest price rally ever. However, many were quick to point out the volatility surrounding the prices of smaller cryptocurrencies, as well as why investing in such coins may not be a good idea.
rise of baby doge
On the morning of July 1, Baby Doge traded at around Rs 0.000000063612. day after Musk’s tweet, the price of the coin increased by almost 1.4x to Rs 0.000000155717. This was the highest price ever in Baby Doge’s short existence, as it increased 8 times in a month since its launch in June. However, as the price of Baby Doge started to rise and reports based on Musk’s tweets and crypto prices started pouring in, the coin prices also saw a drop.
At the time of writing, Baby Doge is priced at Rs 0.0000000136251 – 12.5 per cent less than its peak yesterday. The movement is in line with market reports suggesting that Baby Doge’s price will fluctuate significantly and the market will fluctuate, especially as a result of Musk’s tweet. Given the volatility, some might even consider it a quick, concise way to make money.
But, should you really invest in it?
Among the many factors that experts will advise you to examine before investing in cryptocurrency are two factors – one, the use case and objective of a cryptocurrency, and two, the daily trading volume and market cap of a coin, which Overall number of coins in circulation. The two factors, although not exhaustive, can potentially give users an indication of whether a cryptocurrency is even worth investing in.
Taking the first point, Baby Doge faces her first red flag. This, according to current knowledge, is a meme coin made as a joke – based on Another meme coin made as a joke. Musk’s earlier favorite, Dogecoin, went to a record rally a while back based on the SpaceX and Tesla chief urging people to invest in Dogecoin – even saying that Dogecoin “The future is.”
However, such rallies based on a single individual’s words have no equity or value attached to any real resource, and are, as a result, the worst kind of investment as it opens the door to practically endless volatility. drop offs. While one can potentially make unexpected gains, they can also lose it within minutes. Given that the number of Baby Doges is even lower, its volatility factor is even higher.
Key Factors Behind Investable Cryptocurrencies
Taking into account market cap and circulation figures in terms of bitcoin, the largest cryptocurrency in the market right now, Baby Doge has 420 quadrillion coins in circulation, 20 billion times the number of bitcoins in circulation (21 million) right now. is. This large number of coins already caused massive value dilution, and Baby Doge now reports a fully diluted value of Rs 5,594 crore.
The fully diluted value of a cryptocurrency represents its market cap, if the coin were in full circulation. At the moment, public cryptocurrency indices and databases such as coingeco There is no data on the circulating supply of Baby Doge, but at the same time, the potential market cap of the coin does not give an investor any data about whether the coin is undervalued. It is also 0.12 percent of bitcoin’s market cap.
considering the small legitimate cryptocurrency Like Chia, Cardano and the likes, Baby Doge is infinitely small, which raises further questions about its stability. Being a meme coin, it is neither listed on any major coin index for open trading, nor does it offer a white paper. In comparison, Viable Coins offer both. Furthermore, in terms of value, cardano report Current market capitalization of Rs 3.1 lakh crore (6.7 per cent of bitcoin) with 45 billion coins in circulation.
while chia hav coins With a small market capitalization of Rs 2,115 crore, as well as significantly fluctuating prices and limited daily trading volume, they have a distinct, viable and valuable end-user use case. For example, Chia offers proof of time crypto mining experiences to use extensive cloud storage to bring more coins into circulation, aiming to address the environmental impact of conservative proof of work cryptocurrencies such as Bitcoin and Ethereum. is from.
The latter two also have massive real world implications. For example, bitcoin has long been billed as a viable hedge against gold price inflation, as the latter’s availability has decreased. Meanwhile, the Ether blockchain network has emerged as a major means of decentralized financial and operational tools, commonly known as DeFi.
Given that Baby Doge has none of the above factors going for it, putting your trust and money in a meme coin based on Musk’s words might not be the most prudent action.
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