Dogecoin (DOGE 6.40%) fell on Tuesday, down 4.2% as of 1:12 p.m. ET, as measured from 4 p.m. on Monday. The move comes as the S&P 500 (^GSPC 0.36%) and the Nasdaq Composite (^IXIC 0.45%) lost 0.2% and 0.3%, respectively.
The meme coin is falling with much of the market as investors anticipate a government shutdown. More speculative assets like Dogecoin tend to see outsized drops when the market is uneasy.
Crypto investors brace for a shutdown
While a U.S. government shutdown could be avoided, the clock is ticking. Legislators need to pass a funding bill by the end of the day, but both sides of the aisle are playing hardball and refusing to budge. The market seems to be anticipating a shutdown.
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It wouldn't be the first time -- there have been 14 shutdowns since 1980 -- but a shutdown introduces uncertainty, which often leads to a dip in the market. Investors like stability.
Dogecoin is a very risky asset
Dogecoin's drop today outpaced most of the crypto market because it's a meme coin with no real value. It is highly speculative and built on hype. It really shouldn't be viewed as a serious investment; it is more of a bet.
While today's dip could look like an opportunity to buy, I wouldn't. Dogecoin can fall a lot further. A more serious market event could cause Dogecoin to plummet.
Investors should instead look to cryptos with a proven track record of value and projects with innovative technology. Bitcoin and Ethereum are much smarter plays.
