Quite often, especially with newcomers, we encounter the question of whether to invest in a specific cryptocurrency. It is mostly a coin that has recently seen a sharp price growth or is currently being written about more in the media. Similar cryptocurrencies are also sometimes promoted by globally or locally known personalities and thus attract less experienced investors. But are these investments the right choice to enter the crypto world?

A good example to answer this question today is the increasingly well-known cryptocurrency Dogecoin (DOGE). It even came in fourth place in terms of total market capitalization at nearly $ 67 billion. It has overtaken known cryptocurrencies such as Cardano, Polkadot and Litecoin. In the last month, it has added hundreds of percent to the price, and the media is literally flooded with news about new crypto millionaires. It is similar information that causes the so-called FOMO (Fear of Missing Out) effect, in which investors are afraid that they are losing their life opportunity and do not want to miss it. This in turn significantly affects their behaviour and trading strategy, which is no longer based on rational thinking and facts.

The key factor that attracts newcomers to similar investments is thus exclusively the rising price of the cryptocurrency. They often do not even know the basic information about the cryptocurrency itself and the project behind it. We even find that people are considering investing and know nothing about cryptocurrencies in general. It's like investing in a business of a stranger without any experience in the industry, and you don't care what the company's plans are. However, this is the most crucial thing for the future price of the cryptocurrency. If a company really works on something, it creates values, which are then in time reflected in the prices of assets associated with it.

Did you know that Dogecoin was originally created just as a joke? This is really true, and there is no real project behind this cryptocurrency, and therefore no real value. Its value thus consists only of speculation on the future growth of the price, which, however, will again be based only on the inflow of new capital. In addition, the price is being pushed up by the support of the well-known Elon Musk, the founder of Tesla. However, he himself is often accused of influencing the market through his large reach on social networks. The price can drop to zero practically at any time.

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We do not claim at all that investing in a cryptocurrency such as DOGE cannot be lucrative. However, it should be understood that the market and prices are mainly driven by large investors, who often use the "Pump and Dump" technique. It consists of pushing the price of the asset sharply through purchases and positive news, and this movement will attract other traders and investors, who will create even more pressure on price growth. At the point where large investors realize that they have enough, they withdraw their deposits with significant profit and the price falls immediately. In addition, small investors, who are foolish by rising prices (FOMO), usually have no chance to react to this decline and can easily lose all funds relatively quickly.

A similar situation occurred with Dogecoin, where the price of the new ATH was expected to rise to $ 1.00 and the reality was exactly the opposite. Many people lost their money during the weekend at a 30% drop, despite the fact that experts and analysts warn almost constantly about this cryptocurrency.

However, this certainly does not mean that all cryptocurrencies work similarly and in fact have no value. If, for example, you are seeing a rise in the price of Bitcoin, this is a network that is increasingly used in the real economy and a huge number of other projects are built on it. The same can be said about Ethereum, on whose network literally thousands of projects operate and thus create real value. If you buy Binance Coin (BNB), you are again investing in growing trading volumes on their exchange and their entire ecosystem. Also, the purchase of Dollero cryptocurrency (DLLR) in an ongoing private sale represents the confidence that we will launch our crypto exchange and this solution will be on sufficient quality level to gain a foothold on the market.

Read also: WILL ETH SHOW US NEW HIGHS SOON?

We keep saying it all the time and that is why we will repeat it today. Always check at the maximum possible level any project in which cryptocurrency you want to invest and do not let yourself be affected by any unsubstantiated price increase. The real value that the project creates is important. To make profits on price fluctuations, you must have experience with trading, without which you can lose your money very quickly and unnecessarily. At Dollero Technology, we fully understand the importance of education in this area, which is why the Dollero Academy is part of the project, in which you will gradually acquire all the necessary knowledge. Education is of course free and you just need to register. In addition, a bounty campaign is running on this platform, where you will also receive your free, perhaps the first cryptocurrency Dollero, for successfully completing quizzes, monitoring our social networks and sharing articles.