It is a fact that crypto coins have not fallen out of the headlines in recent months due to speculative prices and a series of undesirable events. However, it can be said that this negative process is interesting for those who invest in crypto coins and those who are thinking of doing it, and especially three types of digital currencies have attracted attention in this period. These crypto coins that stand out; Bitcoin (CRYPTO:BTC), Ethereum (CRYPTO:ETH) and Dogecoin (CRYPTO:DOGE).
Not all cryptocurrencies are equal, and it can be difficult to decide which type of digital currency will be the right investment. Like any investment, cryptocurrencies have their advantages and disadvantages. Therefore, the cryptocurrency you choose to invest in will depend on your investor profile.
Investor profile is important when investing
First of all, it is necessary to consider whether cryptocurrency investing is the right investment alternative for you. All cryptocurrencies are highly speculative investments that are subject to extreme volatility. Since the long-term success of cryptocurrencies cannot be guaranteed, you should make sure that you have a very high tolerance for risk before you decide to invest in this area.
If you are absolutely sure that you want to invest in cryptocurrency, below we have tried to explain the features of Bitcoin, Ethereum or Dogecoin and how to decide if they are the right investment.
Using the word “safe” is not easy for a cryptocurrency. Still, in the trio of Bitcoin, Ethereum, and Dogecoin, Bitcoin deserves this word a little more than the others. However, this does not mean that Bitcoin does not carry the same risks that all cryptocurrencies have. However, it can be said that it has some advantages over its competitors.
Bitcoin is the original cryptocurrency and has the most recognition and reputation of all cryptocurrencies. For example, institutions or merchants that accept cryptocurrencies as a form of payment are more likely to accept Bitcoin than other digital currencies. Its widespread adoption seems to be the key to the long-term success of this digital currency. Therefore, it can be said that Bitcoin is one step ahead of its competitors.
In addition, Bitcoin is often referred to as “digital gold” because it can be produced in limited numbers. This shortage of production is a feature that increases the value of Bitcoin and shows that this increase may continue in the future.
Ethereum is the most popular cryptocurrency after Bitcoin. Technically, Ethereum is a type of blockchain technology, and Ether is a “coin” hosted on the Ethereum blockchain.
You can invest in Ether by buying coins, just like investing with Bitcoin or Dogecoin. Direct investment in Ethereum blockchain technology is not possible today. But when you buy Ether, you also support the blockchain foundation behind it. Alternatively, you can invest in companies that use the Ethereum blockchain. If Ethereum continues to grow, these companies will also thrive.
The biggest advantage of Ethereum is that it has different applications beyond being a cryptocurrency. For example, Ethereum; A Non-Fungible Token (NFT), in its shortest definition, is the blockchain behind digital assets that are unique and is the foundation of decentralized finance. NFTs represent digital assets like no other, from collector’s products to virtual gaming content and digital properties. Blockchain technology has the potential to revolutionize many areas of business, and Ethereum is one of the biggest players in the blockchain space.
Although Ether is not as popular as Bitcoin, it has great potential in the eyes of its supporters. It should be considered riskier than Bitcoin because it does not have the same history, but it should be kept in mind that it has the potential for higher returns due to this risk it has.
Dogecoin is known to have experienced an incredible breakout this year. The price of Dogecoin, which exceeded 0.49 US dollars for the first time with a daily rise of 29 percent, has increased by more than 10 thousand percent since the beginning of the year. However, Dogecoin remains the riskiest cryptocurrency in this triple list. This is primarily because Dogecoin, unlike Bitcoin and Ethereum, does not have a significant competitive advantage in the crypto industry. Because Dogecoin was created as a joke based on the meme coin, which was initially launched to mock food and food-oriented crypto money projects, and this damaged Dogecoin’s credibility. The main reason for the increase in the price of Dogecoin can be shown as the praise it receives on the internet. The fact that online investors have increased the price of Dogecoin to quickly turn a profit and especially famous billionaires such as Elon Musk have promoted Dogecoin on social media are the reasons for this rise. But it should be remembered that when the price of any investment does not match the underlying fundamentals, it is only a matter of time before it experiences a rapid decline. So if you choose to invest in Dogecoin, you should only invest as much as you can afford to lose.
Choosing the right cryptocurrency
Which cryptocurrency you choose to buy, or perhaps invest in crypto as a first step, depends primarily on your tolerance for risk. For example, risk-averse investors avoid even the “safest” cryptocurrencies altogether because of price volatility. But if you’re thinking about jumping into digital currency because of the “zeitgeist” or curiosity or high chance of winnings, you have to be sure of how much risk you’re willing to take. Know that Bitcoin is by far the biggest player in the game, but Ethereum also carries potential and risk. Note that Dogecoin still needs time. By doing your research and carefully evaluating your options, you can make the decision that best suits your situation.