Bitcoin and Dogecoin have been making havoc in the crypto space. Dogecoin memes took the social trading by storm and converted a joke into an $82.88 billion market capitalization. But the recent dip in Dogecoin after Elon Musk’s Saturday Night Live makes you wonder whether Dogecoin or Bitcoin is a better buy?
A developer crafted Bitcoin after the global financial system collapsed in 2009 and governments started printing fiat currency. Fiat currency is when the government prints unlimited paper currency with no backing of gold reserve. The money losses its value and the central bank gets too much power. For a long time, Tesla’s Elon Muk has criticized fiat money.
In 2009, a developer built Bitcoin on the concept of gold. BTC can be used as a global currency and also have a store of value. Only 21 million BTC can be mined in a lifetime. And as more and more people mine BTC, the more difficult it will be to get the digital currency. This was a perfect substitute as no bank will have control over the BTC trading, and it is the decentralized ledger that will keep the accounting of who owns how much.
BTC concept was so revolutionary that many firms like Microsoft and AT&T accepted it as a form of payment. But BTC will have to face the test of time as anything can only become a currency when a majority of people trust in its value.
Although BTC protected your coins from hackers, it maintained trade secrecy, giving way to money laundering and terrorist funding. If regulators can find a way to regulate these activities, BTC could become the future global currency. This will reduce the power accumulation in the hands of a few.
Which crypto – Bitcoin or Dogecoin?
Bitcoin started garnering the attention of hedge fund investors in November 2020 when the governments stalled the pandemic crash with fiat money, understandably. But Dogecoin rose to fame in February when Elon Musk took to Twitter to post memes around Dogecoin. Just some Twitter memes saw Dogecoin surge to 2,400% in three months. And just one statement of Musk on Saturday Night Live that Dogecoin “is a hustle” sent the coin down more than 20%.
Now analysts say that backing from Amazon’s Jeff Bezos could send Dogecoin to new highs. Isn’t it absurd that Dogecoin multiplied the very thing BTC tried to prevent (accumulation of power)? A developer created Dogecoin in 2013 as a spoof to BTC. So if you look at the logic, a joke will only grow when that joke goes viral. But putting your money in a joke is no joke.
Musk has not invested a penny in Dogecoin. And anything remotely crypto around Musk is that his company Tesla has invested US$1.5 billion in BTC as an alternative investment. Instead of burning your hard-earned money in a good laugh, read between the lines. Even if you are just following Musk, follow him correctly. He never misled anyone. Musk has clearly stated in one of his tweets that he only owns Tesla shares.
Which is a better buy – Bitcoin versus Dogecoin?
I am not in favour of cryptocurrency as it still has a rocky regulatory road to travel before becoming an official currency. But there is no harm in investing only a small fraction, less than 2% of your portfolio in BTC. Remember, Dogecoin is unlimited and gives tremendous power to influencers like Musk and Bezos, destroying the very purpose of an alternative to fiat currency.
Whereas, companies and hedge funds are looking to accept BTC. Canada has also accepted BTC as an investment. Canada launched North Americas’ first BTC ETF Purpose Bitcoin CAD ETF (TSX:BTCC.B). The ETF buys and stores BTC and follows all the rules of the stock exchange.
You can’t buy BTC through your Tax-Free Savings Account (TFSA), but you can buy the Purpose Bitcoin ETF from this account. You have to pay 1% in asset management charge to get exposure to the value of the BTC pile stored in a digital vault.