Dogecoin Might Be Popular on Twitter, But it’s Not in the Real World

InvestorPlace – Stock Market News, Stock Advice & Trading Tips

TRG Datacenters recently reported results it found from studying tweets between January 2021 through January 2022. Tweets about Dogecoin (DOGE-USD) were 94% positive, making it the most popular cryptocurrency. The least popular was Ethereum (ETH-USD). The data center solutions provider found that 29% of the tweets about the second-largest crypto over the past year were negative, making it the most disliked of the five major players it studied. 

Dogecoin might be popular with retail investors, but that’s done nothing to keep DOGE-USD from falling in price. Down 23.3% over the last five days, you are naïve to think it has bottomed. The entire cryptocurrency industry is under siege right now. Bitcoin (BTC-USD) is lower than it has been in the past year. Ethereum hasn’t been this low since July 2021. And TerraUSD (UST-USD), which is supposed to be pegged to $1, is at 40 cents. Estimates put the cryptocurrency damage at $800 billion in losses over the past month. 

Bank of America’s (NYSE:BAC) global crypto and digital asset strategist Alkesh Shah believes that if investors manage expectations, the future should be a bright one for the broader industry as it matures. Shah reminds investors that it’s still up considerably from 16 months ago. That probably doesn’t provide comfort to any investors who bought DOGE-USD a week ago at 14 cents.  

However, there is one way to avoid sleepless nights. Limit your cryptocurrency exposure to no more than 3% to 5% of your overall investment portfolio. If you’re a risk-averse investor, it is unlikely that you would put more than that in micro-cap stocks. Dogecoin and the rest of them are no different. 

The best cryptocurrencies to invest in are those that provide the most utility from their blockchain technology. Decentralized finance projects are one example, but many others include securing personal information, non fungible tokens, and tracking the supply chain.   

Dogecoin might be popular with Twitter users, but if it doesn’t deliver utility sooner rather than later, it will fall out of the top 10. In the meantime, there is no hurry to buy Dogecoin or any other cryptocurrency. I’d say the same about stocks.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

The post Dogecoin Might Be Popular on Twitter, But it’s Not in the Real World appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.