When people have money, their words are not always advice for you to take.
When Billionaires use social media, be careful not to follow their advice word for word. Their advice could make you broke before you ever know what happened.
If you have followed cryptocurrencies even for a little while, Elon Musk and Mark Cuban have indirectly advised people to invest in Dogecoin. This will come back to hurt many people who have no idea what they are doing.
Dogecoin is easy for any person to buy and start investing or trading.
When Dogecoin was trading for less than a penny, Dogecoin was a joke because it was a meme of a dog.
Two software engineers created Dogecoin on December 6, 2013, as a joke.
Billy Markus, an IBM programmer from Portland, Oregon, found Jackson Palmer, who worked for Adobe (ADBE). Palmer bought the domain dogecoin.com. The “doge” meme was popular on the internet at this time. Markus wanted to make his cryptocurrency different than Bitcoin.
The dog on Dogecoin is a Japanese breed of dog Shiba Inu.
Bitcoin has a set supply of 21 million Bitcoins where Dogecoin has 129 million coins and more can be created each year. Cryptocurrencies are valued by supply and demand. Generally, the less supply available or more scarcity for a cryptocurrency, the higher the price. But then the more supply available for a cryptocurrency, the lower the price for the coin. There is more based on the use of the cryptocurrency but this is generally how it works.
When Elon Musk tweets about Dogecoin, millions of his followers are seeing this. Musk has over 51 million Twitter followers. Some of his fans are hoping Dogecoin reaches $1 or more. This reminds me of the GameStop trading that WallStreet Bets was doing and gathering many other people to trade with them.
The danger of this is some people have never invested before or they have limited experience investing. What happens if one day the Dogecoin whales decide to cash out? This will cause the price to drop very fast.
If a person who invested in Dogecoin is not paying attention, they could lose a lot of money.
Twitter screenshot created on Canva
I have seen some people share screenshots of them buying Dogecoin when the price was over .20 cents. If they sell Dogecoin over .20 cents, they’ll make a profit. But what if the price falls below the price they bought this cryptocurrency? They will lose money. This could be a few dollars up to hundreds or thousands of dollars.
Dallas billionaire Mark Cuban is doing the same when he tweets about or mentions this cryptocurrency. In February, Cuban said that Dogecoin has no intrinsic value.
On a positive note, Mark Cuban recently announced he wants to give a purpose to using Dogecoin. Cuban announced that fans can use Dogecoin at Dallas Mavericks games. Fans can buy tickets and merchandise using Dogecoin.
Cuban and Musk are having fun with Dogecoin. When they have billions of dollars each, they can do whatever they want to do.
In the past, Musk has been fined by the SEC for making tweets about misleading Tesla investors. He tweeted about taking Tesla private and the stock price dropped. As a result of this, Musk had to step down as the Tesla chairman, and he and Tesla each had to pay a $20 million fine.
It doesn’t seem like Musk has learned that his tweets can be costly. This time it could cost Dogecoin investors.
See these other articles on cryptocurrencies.