Dogecoin SOARS 8,900% in 2021!

Dogecoin is truly soaring, as is HIVE Blockchain Technologies (TSX:HIVE) stock. Should you invest?

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Cryptocurrency is delivering some mighty gains in 2021. Bitcoin is up nearly 100%, Ethereum is up about 350%, and Dogecoin–the crypto that started as a joke–is up 8,900%.

Yes, you read that right: 8,900%.

Starting the year at US$0.006, it was at US$0.54 as of this writing–a truly stunning gain. DOGE has enjoyed a surge of interest on social media, which has helped propel its price higher. Elon Musk and Mark Cuban are among those who have promoted the coin; with 60 million Twitter followers, they have a lot of clout between them. No doubt, their posts have played a big role in Dogecoin’s meteoric rise. But there’s more to the story than that. In this article I’ll explore Dogecoin’s massive 2021 gains, and whether the coin is still worth holding today.

DOGE breaks US$0.54

The biggest contributor to Dogecoin’s 2021 rally was a sharp surge that began in late January.

At the start of January, DOGE had been hovering around US$0.006. By January 3, it was up to US$0.01 (one cent). At the end of the month, it had reached US$0.03. By February, it was seeing prices around US$0.033 and US$0.05. In April, DOGE started really picking up momentum, breaking US$0.1. By early May, DOGE had gone all the way up to US$0.54. That’s about the level it was at as of this writing.

What if you’d invested $1,000 at the start of the year?

The percentage change in Dogecoin’s price alone is a remarkable figure. But when you consider how much money you could have made by buying it, the numbers get truly insane. If you’d bought $1,000 worth of DOGE when it was at US$0.006 and sold at US$0.54, you’d have cashed out US$90,000 — that is, a US$89,000 gain plus the US$1,000 you started with. A pretty phenomenal return for just US$1,000 invested.

A publicly traded crypto alternative

If you’re looking at all the gains Dogecoin has been posted, you might be tempted to buy it. Indeed, compared to Bitcoin and Ethereum, DOGE is far cheaper while having stronger momentum. But that doesn’t necessarily mean it’s a great investment. Past results don’t tell you what future results will be, and Dogecoin is obviously benefitting from a huge social media influencer push. When Musk, Cuban and company get bored of DOGE, it might stop flying.

This is one reason you might want to consider researching blockchain stocks like HIVE Blockchain Technologies (TSX:HIVE). These are stocks that make money by mining and selling crypto. Typically, they mine a variety of different cryptocurrencies, so you aren’t just betting on one “meme”-worthy coin when you buy them.

In HIVE’s case, it mines Bitcoin and Ethereum in climate-controlled data centers. Both of those cryptocurrencies have seen solid gains this year. Unlike Dogecoin, they’re sometimes used in actual transactions, so they have more of an economic purpose. In its most recent quarter, HIVE generated $13 million in revenue, up from just $5 million a year before. It was a blowout quarter — and HIVE’s stock has risen right along with the company.

Is HIVE stock a sure bet? Certainly not. But it may be more sensible than a “joke” currency like Dogecoin.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned.

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