How to Buy Dogecoin in 2024
The OG memecoin remains a popular choice for crypto investors. If you want in on the action, follow our complete guide on how to buy Dogecoin in 2024.
The most straightforward method to acquire Dogecoin (DOGE) is through a crypto exchange, where you can buy DOGE using US dollars or other cryptocurrencies. However, it's essential to understand the investment and to use a reliable exchange before adding Dogecoin to your portfolio.
Decide whether to buy Dogecoin
Before you buy Dogecoin, you need a basic understanding of what you’re actually investing in, including:
Technology: Utilizes proof-of-work mechanism. Dogecoin continues to use a proof-of-work system to verify transactions on its blockchain, which is slower and more energy-consuming than proof-of-stake systems used by other cryptocurrencies.
Volatility: Dogecoin's price is highly unstable, often due to its limitless supply and significant influence from social media buzz and public speculation.
Pricing: Typically trading well under one dollar, Dogecoin is among the cheaper cryptocurrencies, with its highest recorded price at 74 cents in 2021.
Transaction costs: The average fee for a Dogecoin transaction is below 10 cents, making it one of the less expensive cryptocurrencies to transact.
Dogecoin is a speculative and highly volatile asset. As with all investments, it should only be considered if you are financially stable and can afford to potentially lose your investment.
Read next: Is crypto a good investment?
Conventional investment advice recommends limiting high-risk assets like Dogecoin to no more than 10% of your total portfolio. If your portfolio already includes a variety of index funds and you regularly contribute to these accounts, you might be ready to diversify into alternative investments such as cryptocurrencies.
Choose where to buy Dogecoin
Purchasing Dogecoin is easiest on a centralized exchange. Being a popular cryptocurrency, Dogecoin is commonly listed on major exchanges. Ensure that the chosen platform allows you to manage a personal digital wallet for sending and receiving Dogecoin, as some brokers restrict transactions to fiat currencies like USD. Dogecoin is available for purchase on exchanges such as:
Alternatively, Dogecoin is traded on decentralized exchanges, which facilitate peer-to-peer dealings. These platforms typically have lower fees but demand more technical knowledge and are best suited for experienced crypto investors.
Read next: What’s the best crypto exchange?
Pick a payment method for Dogecoin
There are primarily two ways to fund your Dogecoin purchase:
Cash: Most exchanges accept fiat currencies such as the U.S. dollar. You'll need to set up an account on your chosen exchange and link a bank account to deposit funds.
Cryptocurrencies: If you possess other digital currencies, you might be able to exchange them for Dogecoin. Check your chosen exchange to ensure it supports trading pairs with Dogecoin.
Read next: How to buy Dogecoin on eToro
Store your Dogecoin securely
After buying Dogecoin, you need to store it securely. You have a few options here, but the best practice is to store it in a cold, offline wallet:
Exchange: Many users keep their digital assets on the exchange where they bought them. This is convenient but risky, as demonstrated by the FTX and FTX.US collapses.
Hot wallet: For enhanced security, a digital wallet is advisable. Hot wallets are online constantly, providing convenience but potentially increasing hack risks.
Cold wallet: Cold wallets remain offline, offering security at the expense of accessibility. This is considered the safest way to store crypto you’re not actively trading.
Read next: What’s the best way to store crypto?
How to sell Dogecoin
To sell your Dogecoin, simply navigate to your holdings on your preferred cryptocurrency exchange, specify the amount you want to sell, and submit your order. If your Dogecoin investment has made a profit, be aware that you may owe Capital Gains Tax on these earnings.
Read next: Dogecoin taxes
Should I buy Dogecoin?
Originally created as a satirical nod to cryptocurrencies, Dogecoin is now regarded more seriously by many investors. Nevertheless, it remains a high-risk investment. Financial experts typically advise allocating only 3% to 10% of your investment portfolio to cryptocurrencies.
The amount you choose to invest in Dogecoin should reflect your financial stability, risk tolerance, and current financial goals. For instance, if your retirement savings are lagging or you lack an emergency fund, it would be prudent to limit your investment in Dogecoin.
Conversely, if you are financially secure, on track with your retirement savings, and have substantial savings, you might consider a larger allocation to Dogecoin.
Dogecoin tax
Lastly, Dogecoin, while often seen as a fun and speculative part of the crypto world, comes with its own tax implications. Profits from trading or holding Dogecoin are subject to the same tax rules as other cryptocurrencies.
Koinly tracks all popular cryptocurrencies to calculate your gains and manage your tax reporting. Get your Dogecoin taxes done fast with Koinly.
FAQs
How does Dogecoin work?
Dogecoin operates on a decentralized blockchain similar to Bitcoin, serving as a public ledger for all transactions. There is no central authority governing Dogecoin; instead, a global network of computers verifies and processes transactions. The creation of new Dogecoin units results from a process known as mining, where miners use their computing power to maintain the network and are rewarded with new coins.
How do I use Dogecoin?
Dogecoin can be utilized for purchases or as a form of payment to other individuals. A number of merchants and businesses now accept Dogecoin, and it is frequently used within various online communities and forums to trade for goods and services.
How can I earn with Dogecoin?
You can earn rewards on Dogecoin by participating in staking on certain cryptocurrency exchanges and wallets. Staking involves locking your coins in a wallet to support the operational integrity of the blockchain, helping to validate transactions. While this can provide a passive income, it often comes with a minimum balance requirement and may incur fees or face other limitations.
What’s the connection between Dogecoin and Elon Musk?
Elon Musk has prominently influenced Dogecoin's popularity and market activity through his active social media engagement. Often referring to himself as the "Dogefather," Musk's tweets about Dogecoin have led to noticeable price swings. His comments have sparked discussions about market influence, with a growing interest in Dogecoin among his followers, further fueled by his mentions in interviews and social media posts.
