At one time, Dogecoin (CRYPTO:DOGE) was the breakout meme coin of the crypto world, soaring by a staggering 26,000% between May 2020 and May 2021.
Though it has fallen from grace over the past two years, Dogecoin still boasts a loyal following. Many crypto fans are hoping that it will be able to make a comeback, and if that were to happen, buying now while prices are lower could be a smart move.
But is Dogecoin really a good investment in 2023? And could it potentially make you a millionaire?
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Is crypto a safe investment right now?
Cryptocurrencies have been having a rough year. Between the plummeting prices, the scandals and lawsuits, and an overall weariness about investing in general, many people have been shying away from tokens.
In some cases, that can make right now look like a fantastic buying opportunity because prices are lower. A few of the largest cryptos -- including Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) -- have seen positive returns so far in 2023.
However, it's wise to only invest in cryptocurrencies that have strong competitive advantages and some degree of intrinsic value -- and at the moment, Dogecoin has neither.
Dogecoin is fighting an uphill battle
Dogecoin's price has fallen by nearly 90% from its mid-2021 peak. While that's not a unique story in the crypto space (Solana, for example, is currently down by more than 94% from its high), Dogecoin may not have what it takes for a rebound.
Unlike tokens that feature smart contract platforms like Ethereum or Solana, Dogecoin doesn't add value to any financial system. It also doesn't derive value from another asset as a stablecoin does. And while it can be used as a form of payment, very few merchants accept Dogecoin.
The crypto's biggest advantage, then, is its community. While that can make for exciting short-term potential if Dogecoin's fans are able to drive up its price as they did in 2021, it's not a sustainable long-term investment.
This doesn't necessarily mean Dogecoin is doomed to fail. After all, the crypto industry is wildly unpredictable, and everything is still speculative right now. But trendy investments like meme coins are incredibly risky, and you're far more likely to lose money buying them than you are to get rich -- let alone reach millionaire status.
Where should you invest instead?
Again, cryptocurrencies in general are still speculative assets. There are no guarantees that any of them will pan out as investments over time. But there are far safer cryptocurrencies out there to bet on than Dogecoin.
Perhaps the two safest options are Bitcoin and Ethereum. These juggernauts combined make up roughly two-thirds of the value of all cryptocurrencies.
Bitcoin is far and away the leader in the payment coin space, and many investors are also using it as a store of value -- calling it a form of "digital gold." Meanwhile, Ethereum is the most popular platform for decentralized applications ranging from NFT marketplaces to the metaverse to DeFi.
If you're willing to take on more risk for the chance of potentially higher returns, there are plenty of smaller cryptocurrencies with distinct advantages. For example, Polygon and Solana have carved out unique niches, and while they do carry more risk than their behemoth counterparts, they also have more room for growth.
Dogecoin's explosive growth made it an intriguing investment, but there are plenty of better options out there. By sticking to cryptocurrencies with more real-world utility and competitive advantages, you're far more likely to see positive returns over time.
