In Focus: Dogecoin Doesn't Need a Messiah
Updated: Jun 3, 2021
Life Changing Money
On a Monday morning in June of 1995 before the market opened IBM (IBM) announced that it would acquire software company Lotus. The news sent Lotus' stock flying upwards, as investors purchased Lotus' stock off the news of IBM's hostile first offer. IBM would eventually pay $64 per share, more than double the Lotus share price to acquire the company. At the time the Lotus 1-2-3 software was a major competitor to Microsoft's Excel software.
In my time on Wall Street I heard this story many times while cold-calling. People with $250,000 portfolios up to investors with hundreds of millions of dollars in the market, a lot of them would tell me that the Lotus takeover was their biggest win in their investing lives. Well into the 2000s, investors I would talk to would brag to me about their big Louts win. All IBM did was offer Lotus twice its share price to acquire it, meanwhile companies like Yahoo and AOL had more than quadrupled their early investors' money, yet the Lotus deal remained a life changer for many people.
Dogecoin (DOGE-USD) on the other hand has gained nearly 13,000% from the start of 2021 to its most recent $0.73 high. Even after an almost 13,000% move up in less than six months, Doge investors, traders, and enthusiasts were still looking to one man to get it to $1.
It appears $1 is where many Doge holders will enter the gates of riches, which seems to be why there is an obsession with getting it to $1. Having seen this game play out many times before, those getting upset and manic every time the price of Doge falls, and then buying in again when it rises, likely won't cross into the pearly gates of riches.
A 13,000% advance in less than a year is an astronomical move and it should not be taken lightly.
If Dogecoin closes out 2021 trading at $.73, and registers another 13,000% move upward in 2022 - which is highly unlikely - it would put Doge at over $95, which would be absolutely insane if that were to happen. But if you're trading in and out of it because it didn't trade to $1 when you wanted it to, or to $5 when you wanted it to, or to $10 when you wanted it to, it's likely you'll miss a good portion of the ride up if it were to make it to $95.
No Messiah Needed, There is Strength in Numbers
Somehow and in some way Dogecoin investors have made Elon Musk their go to for all things Doge, and they were met with great disappointment when Elon's Saturday Night Live appearance didn't push Dogecoin to that hard to reach target of $1. History has shown me that this idea of a messiah taking crypto to the next level isn't a good basket to put your eggs in, nor is that type of basket necessary.
In the early to mid 2010s, there was the thinking that if Amazon (AMZN) would start accepting Bitcoin (BTC-USD), the Bitcoin price would sky rocket. Almost a decade later, and Amazon still doesn't accept Bitcoin, but the price of Bitcoin keeps going up anyway. In the case of Bitcoin, acceptance by a number of small retailers was more than good enough to send the price of Bitcoin to the moon. Bitcoin found success without the retail messiah.
Dogecoin, which gets to benefit from all the work Bitcoin put in ahead of it, is already being accepted as a form of payment in several places, and rumors have recently surfaced that it will soon be added to Coinbase (COIN). Coinbase is the most widely used crypto exchange in the United States.
In our March 2021 issue of the Seville Report Investment Newsletter we discussed why we were buying Dogecoin. At that time Doge was less than $0.05 a coin. One of our reasons for buying was because of how similar the criticisms of Dogecoin are to those of Bitcoin back in 2010, 2011. The other reason we stated was because it's a joke until it isn't. Bitcoin was considered a joke, and funny money, but its run in 2017 turned a number of ordinary people into Bitcoin millionaires, and it was a joke no more.
Thinking Long Term
Even the best day traders and swing traders I know have strict rules against chasing investment prices.
Seeing Dogecoin hit $1 won't do you any good if you sold out at $0.65 on bad news and then bought back in at $0.85 when things were looking up. I'm talking to you serial trader with no plan. The big money is in the accumulate and hold strategy, just check the GameStop saga for proof.
Keith Gill AKA DeepFuckingValue or Roaring Kitty made his first GameStop investment in 2019. It's now reported that he's made $46 million from his GameStop trade after GameStop's stock price ran from less than $5 in 2019 to over $400 in 2021 . Keith Gill's GameStop trade proved again that the BIG money is still attracted to the buy and hold strategy.