Dogecoin (Cryptography: Doge) And trembles inu (Cryptography: Shibu) It lives a great life in the investor’s imagination thanks to previous parabolic extermination that made several holders billionaires. Of course, both meme coins probably lost a huge amount of money from other investors too. But that doesn’t stop you from wondering whether another coin, or perhaps even one of these two, will again reach the height of the stratospheric sphere under the right conditions.
With that in mind, let’s look into what those conditions are in fact and assess whether another coin will one day fly to or outweigh it, even if it’s not a good long-term investment, like the other two.
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The environment that produced major price spikes in both Dogecoin and Shiba Inu can be described as a speculative frenzy. But that’s a bit of a tautology. Because a super-specialized, super-risky investment in valueless meme coins is not on a massive scale other than those conditions. But what causes a highly speculative period that tends to increase the risk most of the risky assets?
In short, liquidity is the amount of money that circulates in cryptocurrency and traditional markets. There are several components of fluidity associated with Meme Coins.
The factor most investors are most used to is simply how much money potential speculators have on average in pockets and investment accounts. When people are actively given money, like economic stimulus policies in the pandemic era, it releases their capital directly to be allocated to investment.
If they already feel that their standard, low-risk investments are well-supplied in capital, it is natural that people will see more of the risk curve towards smaller growth stocks and cryptocurrencies. With enough slack, some people may be willing to embrace full gambling with the (misguided) hope of using their disposable income to dramatically increase the amount of money.
Another important factor affecting liquidity is the cost of borrowing money, as determined by the key interest rates in the Federal Reserve. The costs are primarily incurred by banks and institutional investors, but also reduces the cost of borrowing for consumers. When a large amount of capital holder can take away cheap loans, the appetite for risky play increases as the return required to cover borrowing costs and change profits is lower. While big players probably won’t buy Dogecoin or Shiba Inu directly, they are sure to invest in risky growth stocks again, raising the price of those assets, thereby creating a wealth effect that smaller holders feel richer, and therefore are confident in playing risky players.
The story continues
Both Dogecoin and Shiba Inu saw prices explode recently, especially during the pandemic in late 2021. People’s disposable income was supplemented by the government, and liquidity was very easy for consumers and financial institutions. In other words, the conditions were optimal for a surge in meme inventory.
Look at this chart:
DogeCoin price data by YCHARTS
As you can see, it didn’t lead to the greatest infringement of all time, but recently it was just a prediction that interest rates would fall even further.
And while there were no other meme coins that reached billions of heights as Dogecoin and Shiba Inu, it is inevitable as long as there is an additional period of liquidity and personal income increase over time. During that same period, these two established coins almost certainly will rise significantly.
Waiting for these meme coins to buy until the environment is suitable for them or one of their successors to go to the moon is not a good strategy. Both Dogecoin and Shiba Inu crash sharply after peak, and technically possible, but there is no reason to believe that they will recover and become a good investment for those who bought at the top.
Given that these gambling and others like that tend to thrive when they are likely to have a little more cash on hand, it’s important to keep an eye on liquidity and be aware of what your tendencies are. Resist the urge to gamble when you have more money than usual, especially if your portfolio is already on track. A better option here is to reinforce safer theatre, rather than throwing away money.
Finally, don’t miss Shiba Inu, Dogecoin, or any other Meme Coin that doesn’t seem to stop its rise (FOMO). The party always ends at the end, and by the time you hear about these coins it’s very good that it’s closer to the end than the start.
Consider this before purchasing inventory with Dogecoin.
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Are there any other dogecoin or shiba inu? Originally published by The Motley Fool
