Investing.com – Dogecoin is down more than 25% after disappointing investors after Elon Musk left the SNL program shortly before.
About Dogecoin Musk’s mother said: “I’m excited about the Mother’s Day gift, and I hope it might not be Dogecoin.”
Her son replied, “Don’t worry, she is, definitely.”
And according to news from the British newspaper, The Independent, the most famous platform in cryptocurrency trading, Robin Hood, suffered a malfunction after a strong decline.
In a later part, Musk continued: “It is the currency of the future, it is a financial means that will not stop, and it will dominate the world.”
He continued, “It is heading to the moon.”
But it seems that this was not enough for the market, and Musk did not reveal any fundamental reasons pushing the currency to rise, except for his words and his constant talk about it. The digital currency has no applications in practical life, and it does not have reliable financial technology. In addition, the supply of them is unlimited, thus dropping the idea of trading on the basis of scarcity.
Many expect that Dogecoin is a bubble that will burst strongly and quickly, because its rise is not based on foundations.
In advice provided by CNBC to investors wishing to buy Dogecoin, he stated that even if you are convinced that it is a bubble, but you think that you can exit before it explodes, this will not work for you.
Experts said speculation is what fuels bubbles.
Also, the speculators know that the currency has existed since 2013, and it was not able to obtain any support that other currencies such as Ethereum and Bitcoin got, so this did not stop them raising the price by more than 12,000%.
“People buy assets even after making sure they are overvalued, because they expect the price to rise further,” says Bruce Mesrak. He holds the position of economics professor at Rutgers School of Science and the Arts.
“They believe they will come out before the bubble burst,” he continues.
But remember: this is what everyone thinks they can do.
“However, when the majority enters an asset bubble, the asset usually has reached imaginary high points, and it is too late to manage the trading plan.”
That is, the majority do not enter the asset at the right time, and exit it at the right time.
Regarding the real or fair value of the currency, Mesrak says, according to CNBC, that it is “very disingenuous.”
With stocks at least you have indicators like profitability repeaters to help you figure out if a stock is worth buying or not, but with Dogecoin this is a dark area that no one can pinpoint.
He concludes: “The rise of digital currencies reminds me of the early stages of the dotcom bubble, when investors tried to evaluate stocks without considering the profits made by companies.”
Followers were waiting for Tesla (NASDAQ 🙂 to adopt Dogecoin as it had before. Earlier in February, Tesla announced an investment of $ 1.5 billion in the largest digital currency, and also announced the possibility of accepting payments using it. This is a kind of real support for the currency, as for what Musk did to Dogecoin was nothing but a repeat of what he said, and he shared it several times on the site. Twitter.