You HODL Dogecoin?

What seems like millennia ago, but was only about a year ago, I wrote on HN about Dogecoin's value proposition being worth a penny. I simply wrote my response to my adult sons when they had asked why I had started accumulating Dogecoin. This essay is similar. This is essentially my response to their queries when they learned I was still HODL'ing my Dogecoin.

By April 20th, 2021, Dogecoin had touched 42 cents. Dogecoin seemed to be headed for a dollar in May while Elon's SNL appearance loomed. Dogecoin has declined significantly since. If a person bought at 42 cents or anywhere near the all-time high of 75 cents, the person is probably sad. We are always sad when we lose our bets.

As a cryptocurrency investor, you are really just a gambler. That is the truth, so do not ever forget it. The entire cryptocurrency universe is fraught with danger. Anyone who is selling charts and analysis in cryptocurrency is selling snake oil. Sure they work sometimes but at any point they might not work because this is one crazy place. The cryptocurrency universe is so lightly regulated it feels like there are NO RULES!

The markets are not mature. There are large concentrations of holders of any given token. These are the whales. They are able to pump or dump with the flip of a fluke. If you are on the wrong side of a whale's wake you will be capsized.

There is no real way to know what the whales might do next. Elliot Wave in mature well-capitalized markets makes sense. In immature markets, like cryptocurrencies, such analysis is risky. Light capitalization and/or volume at any given moment can bring opportunities to whales that do not exist in other capital markets. In cryptocurrency, it is the "Whale Wake" analysis that can pay off.

This universe is about gambling not about "investing". Gambling is gambling. Remember that at all times in the cryptocurrency space. If you think that sounds scary, then stay the hell out of Dogecoin! Dogecoin is a very very dangerous space.

Before listing some reasons to HODL, Dogecoin's dangers need to be surfaced. Firstly, a large portion of Dogecoin is actually held in just a few wallets. It is very concentrated when compared to the distribution in Bitcoin. Bitcoin is far more evenly distributed.

If one looks even more deeply at Dogecoin on CoinMarketCap about the token's holders, one can even find listings of the largest wallet addresses. At CoinMarketCap one can look at the Dogecoin wallet addresses. There are HUGE concentrations of Dogecoin in just a few wallet addresses. Perhaps one or two of these belong to Robinhood, but this is an unknown.

If you look closely at the wallet addresses of the biggest Dogecoin holders, there is a wallet address with "Dogeparty" embedded in the string of characters. One can imagine this might be something "the whale named Elon" might do. Who knows for sure?

With Dogecoin at this price, there are a couple of reasons for me to consider accumulating at this point. One of the most important is because Elon Musk is interested in it. Elon has money and he has a following. His billionaire narrative is fitting right in with the Rollerball Cryptocurrency Hypothesis so there is that.

When he began stumping McDonald's to take Dogecoin, it was clear this cryptocurrency was still on his roadmap into the future. Elon is trying to drum up Dogecoin transactions to reach critical mass. Elon is no dummy and well versed in the ways of money. He is surely familiar with the Big Mac Index. This is why targeting McDonald's makes a lot of sense.

Also, Dogecoin is on Github. Dogecoin is open source, you can go see what is happening in the Dogecoin code base. There seems to be real activity in the Dogecoin universe. You need coders to be doing stuff for there to be pulls and commits. Coders are in short supply these days. Yet Dogecoin source code is getting some keyboard time. Interesting.

Elon Musk attracts the best coders too. It is Elon Musk's involvement in the Dogecoin universe which has brought the Ethereum founder over. At least, that is the only reason I can see why Vitalik Buterin would be involved in the Dogecoin Foundation. Oh yes, one of the most famous cryptocurrency coders of all time is on the board of the Dogecoin Foundation.

Elon Musk has many businesses. He literally has a corporate empire. Elon Musk also has a personal following. That empire has retail outlets in Tesla, and some others too. This means Elon can leverage a personal following of millions who might be inclined to purchase his corporate goods. Were they enriched by Dogecoin price inflation created through usage would they be even more inclined to purchase a Tesla?

Oh yeah, lest we forget, Elon Musk is now in Twitter. He holds five times the stake as Jack Dorsey, the founder, and vocal Bitcoin maximalist. How long do we think it will be before Twitter starts building a "tipping" system based upon Dogecoin? Again, this is fitting right in with the Rollerball Cryptocurrency Hypothesis .

Here is where I can say I think Dogecoin is worth a "gamble". It is not that Dogecoin has some clear value proposition at this price. Rather it is worth the gamble based on Whale Wake analysis. If you have some money you can afford to lose, then Dogecoin might be a gamble with a good pay-off in a few years.

There you go. Please only BET money you can afford to lose. Even if you are smart and careful, the cards will fall as they do. Place your bets people and remember to gamble responsibly.

Disclaimer: The opinions in this article belong to the author alone. Nothing in this article constitutes investment advice. Please conduct your own thorough research before making any investment decisions.