Dogecoin (DOGE 0.65%) was one of the most explosive cryptocurrencies of 2021, skyrocketing by a staggering 9,000% between January and May of that year alone.

While it and many other cryptocurrencies have seen their prices plummet over the past year, many investors are still optimistic that Dogecoin could make a comeback. If that happens, investing now could seem like a good move.

But is Dogecoin really a smart investment? And could it make you a millionaire? Here's what you need to know.

Should you invest in Dogecoin right now?

Those who bought and sold Dogecoin at just the right moment back in 2021 could have seen lucrative earnings. But the crypto landscape is very different now than it was then, and the best investments are the ones with long-term potential.

At the moment, Dogecoin lacks any notable real-world utility. While it has made strides to improve its network (such as the launch of Dogechain in 2022 to bring smart contract capabilities to the blockchain), it's nowhere near the levels of its competitors when it comes to its intrinsic value.

Dogecoin's primary advantage is its community, as it has a loyal group of followers who have kept it alive even after it crashed in 2021. But when a cryptocurrency's worth is based primarily on its popularity, that can be a dangerous game.

If Dogecoin's popularity surges, it could see significant short-term gains. But unless the network starts making big moves to improve its intrinsic value, it will be incredibly difficult for Dogecoin to sustain long-term growth based on popularity alone.

Making money with crypto

There are never any guarantees when it comes to crypto, so there's always a chance that Dogecoin could rebound. But at the moment, it's not a safe long-term investment, and it carries an incredibly high amount of risk.

If you're looking to make money with crypto, you're better off looking for investments with real-world utility and the potential for long-term growth. There are still no promises that these cryptocurrencies will thrive, but the more value a crypto has, the better its chances of succeeding.

Exactly where to invest will depend on your personal preferences. Bitcoin and Ethereum are perhaps the safest options, as they are by far the largest players in the industry and have the most real-world value.

But there are also plenty of smaller cryptocurrencies with loads of potential. Many investors are excited about lesser-known names like Polygon and Polkadot, and smaller cryptocurrencies (with strong fundamentals and real-world utility) often have more potential for growth.

Is it the right time to invest?

Dogecoin may not be the strongest investment, but that doesn't mean you shouldn't invest in crypto. There are a few questions to ask yourself, though, before you buy:

  • Are you willing to tolerate short-term volatility? Even the strongest cryptocurrencies will likely see wild ups and downs in the near term. If that level of volatility makes you nervous, it may be best to avoid crypto for now.
  • Can you keep a long-term outlook? While crypto has the potential to earn explosive returns, it's wise to avoid going into this investment expecting to make a lot of money overnight. But if you stay invested for the long haul and the industry thrives, you could see lucrative gains.
  • Are you able to take on a risky investment? Crypto is still speculative right now, so nobody knows whether it will succeed over time. Before you buy, ensure you're only investing money you can realistically afford to lose.
  • Can you put in the research? The crypto market can change on a dime, and the strongest investments today may or may not be the best options a few years from now. If you're going to invest in crypto, be sure you're not just willing to research your choices now, but stay up-to-date on changes in the industry to decide where to continue investing.

Investing in cryptocurrency is risky, but many investors are optimistic that this industry could be revolutionary. By choosing the right investments and keeping a long-term outlook, you could potentially make a lot of money with crypto.