Dogecoin (CRYPTO: DOGE), the original meme token was first created in 2013, making it one of the oldest cryptocurrencies. Despite significant volatility and little real-world utility of Dogecoin’s blockchain network, the cryptocurrency continues to be one of the 10 largest in the world by market cap at roughly $31.6 billion.
Dogecoin was launched as a joke and has always thrived due to its virality, largely as investors on social media and even celebrities embraced the token. As the crypto sector has gotten a lift from President Donald Trump’s pro-crypto administration, Dogecoin has benefited and is up about 100% over the past year, continuing what’s been a strong overall run.
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If you’d invested $1,000 in Dogecoin five years ago, here’s how much you’d have today.
Image source: Getty Images.
Due to Dogecoin’s scale and how well known it is worldwide, the token has typically moved in line with the crypto sector but at a higher beta compared to the world’s largest cryptocurrency, Bitcoin. This means that Dogecoin has performed better when Bitcoin and most of the crypto sector has risen, but worse so when Bitcoin and the sector has declined.
That said, the huge volatility has clearly benefited Dogecoin investors over the longer five-year period.
Dogecoin Price data by YCharts.
As you can see above, $1,000 invested in Dogecoin is now worth over $60,000, meaning the return is over an astonishing 6,000%. The broader benchmark S&P 500 index is up 87% over the past five years, and much of this time has been characterized by a bull market.
Does this mean you should buy Dogecoin?
I still think the token is extremely risky because it has a substantial market cap, while its network does not yet have strong real-world utility. Dogecoin’s large supply also does not make it a good store of value. Those who have gambled on the token over the past five years have been well rewarded, but I still wouldn’t invest anything more than you can afford to lose.
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Bram Berkowitz has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.