#DogeDay Is Here -- Should You Buy?

Dogecoin's value coin could jump even further on Doge Day 420. It's no joke.

The lighthearted coin that started as a parody in 2013 has taken the crypto market by storm in recent days. Dogecoin is now the fifth-largest cryptocurrency by market capitalization. And its price has risen over 480% in the past week, jumping from $0.07 on April 12 to $0.41 today.

Dogecoin enthusiasts, also known as Shibes, will be looking to push the price even higher today. Keep reading to learn more about this cryptocurrency and why it's a good idea to tread carefully if you plan on buying.

Doge Day 420

The Shibes want to make today (April 20) Doge Day 420. April 20 is unofficially recognized as world cannabis day, and Dogecoin fans want to jump on the bandwagon.

This isn't the first attempt at a Doge Day. Back in 2014, there was a move on Facebook to declare January 21 as Annual Doge Day. That was during what could be called the era of Doge 1.0 -- before both founders pulled out of the project due to concerns about the direction the community was taking and concerns about the involvement of shady players.

A separate Reddit post in 2014 suggested February 8 would make a good Doge Day. The idea was to use the day as a charity pool to raise money for a good cause. During Doge 1.0, the community raised money for several causes, including a water project in Kenya.

And only three weeks ago, some Shibes declared April 1 as Doge Day, perhaps thinking the coin's jokey ethos was suited to April Fool's Day. On that day, there was even a slight jump in the price from $0.053 to $0.061. Given the increase we've seen since, today could be very different.

Should you buy Dogecoin on Doge Day?

There are plenty of reasons to be skeptical about Dogecoin.

One big concern is that Dogecoin has no underlying value. The two things that push up Dogecoin's price are tweets by influencers like Elon Musk and the active communities on Reddit and Twitter who want to send Dogecoin to the moon. "To the moon," in crypto-speak, is when a currency rises off the charts.

Unlike other coins, there's no Dogecoin whitepaper explaining what it's trying to do. And it hasn't seen any big developments since 2015, when the founders pulled away from the project.

Cryptocurrency is a very new and highly volatile market. You may not totally understand blockchain or the possibilities that this technology unlocks. But you don't have to understand the technology behind Apple or Microsoft to know that they are both serious companies. Currencies like Bitcoin (BTC) and Ethereum (ETH), the two top digital currencies by market cap, have teams of people who work every day to take those projects to the next level. Doge doesn't.

Charles Hoskinson, founder of Cardano (ADA) and co-founder of Ethereum (ETH), warns that Dogecoin's stratospheric growth is dangerous for the whole industry. "This is a bubble," he said in a Twitter video. "The price of Doge is not sustainable. It's going to crash and a massive amount of retail money is going to be lost very quickly."

He believes that if that happens, regulators and lawmakers will get involved. And he feels that will hurt the cryptocurrency industry.

Another concern is a February Wall Street Journal report that one person owns almost 30% of all the Dogecoin in circulation. There's been a lot of speculation as to who that person is, but the anonymity of cryptocurrency makes it hard to know. What we do know is that if that person sells, it could have a huge negative impact on Dogecoin's price.

The Dogecoin community is a lot of fun. That being said, if you do decide to participate in Doge Day and buy today, be aware that it could be risky.

If you'd bought $10 worth of Dogecoin a week ago, you'd have about 140 Dogecoin, which would be worth about $57 if you sold today. But many Shibes aren't thinking about selling. They're hoping the price will keep rising and are excited about the potential for the coin to hit $1.

If you do decide to join in, it's a good idea to invest wisely. That means don't invest money that could be used to pad your emergency fund or retirement accounts, make sure you buy it through a trustworthy cryptocurrency exchange, and don't spend anything you can't afford to lose. When it comes to Dogecoin or any risky investment, it's all fun and games until you start losing money.