Why is Dogecoin increasing in value this week?

Dogecoin (DOGE), has witnessed its value surge in the last week. By Saturday, the price per token had increased by 26% in a week. And it's nearly doubled in the last few of weeks. That is a substantial return in a relatively short amount of time for anyone who holds it.

Thus, what

It's difficult to pinpoint a precise reason for Dogecoin's meteoric rise. However, there is an important broader pattern worth noting. As it turns out, individual investors are still trading cryptocurrency in large quantities! Coinbase Global, which facilitates cryptocurrency trading, announced its quarterly financial results earlier this week. Monthly transactional users (MTUs) on the company's platform climbed by a stunning 44 percent from the previous quarter. Additionally, trading volume surged by 38% during this time period.

Dogecoin is the seventh-largest cryptocurrency in the world by market valuation, according to the website CoinMarketCap. As more individuals begin trading cryptocurrency, Dogecoin is likely to be high on their list of coins to purchase. Previously, investors could not trade Dogecoin on Coinbase, but the company began supporting the cryptocurrency on June 3, allowing the approximately 9 million MTUs on the platform to trade it. And, as is the case with everything else in economics, if demand for dogecoins exceeds supply, prices will rise, as they have done over the last week.

What is the next step?

Cryptocurrency investors are genuinely curious about the future of Dogecoin. However, the answer is contentious. Finder surveyed 42 bitcoin specialists to ascertain their perspectives. According to the survey, 80% of respondents feel Dogecoin is a bubble. However, some of those analysts anticipate the price will continue to rise this year before bursts next year. Some feel that a Dogecoin price of $1 is achievable this year.

A closer examination of Finder's survey results reveals a diverse spectrum of ideas, including the notion that Dogecoin will be nearly worthless by the end of the year. In short, so-called experts are polarised. However, here's the rub: They're divided because no one (not even you or me) truly knows what the future holds for Dogecoin. The experts are all making educated guesses.

In comparison to equities, developing a strong confidence in a Dogecoin investment is difficult. Stocks allow for the development of strong convictions since they represent ownership holdings in a real-world business. It is significantly easier to forecast the future cash flows of a business with a high recurring revenue stream. Investors can then develop a positive thesis and allocate a significant portion of their portfolios to favourable possibilities. That is not the case with Dogecoin and other cryptocurrencies.

That is not to say Dogecoin cannot go higher — it most certainly can. And this in no way implies that you should refrain from purchasing cryptocurrency. Simply said, it means to anchor your convictions in reality and invest accordingly.

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