Dogecoin jumps after Mark Cuban’s comments. What you need to know about the rally

Dogecoin, the cryptocurrency named after a meme of a shiba inu dog, is rallying again.

The digital coin jumped 10% on Monday to more than 35 cents, according to data from Coin Metrics.

The latest dogecoin price action was spurred on by two of its most prominent supporters. Dallas Mavericks team owner Mark Cuban told CNBC Make It on Friday that he believes dogecoin is the most powerful cryptocurrency for making real purchases. In March, the team became the first in the NBA to accept dogecoins for the sale of tickets and merchandise.

More Investing in you:
As home prices rise, here’s what buyers can do to close a deal
Are you feeling financial stress? Here’s how your employer can help
You can still use free college money – here’s how

Then, on Saturday, Elon Musk, CEO of Tesla and SpaceX tweeted that he agreed with Cuba on the nature of the play.

The rally pushed the coin’s market cap to nearly $ 44 billion, placing it solidly in the top 10 cryptocurrencies, alongside Bitcoin, Ethereum, Binance Coin and Tether, according to CoinMarketCap. In the past seven days, dogecoin has risen by over 40%.

Still, the cryptocurrency is far from its all-time high of around 73 cents per coin, reached in May.

Even in the midst of the comeback rally, experts are warning investors not to go into dogecoin just to make money. Cryptocurrencies are very volatile, which means the current streak could reverse at any time.

Only invest what you are willing to lose

Financial experts generally advise people looking to invest in cryptocurrencies to allocate a small portion of their portfolio to assets. The UK’s Financial Conduct Authority has issued a similar warning.

“Never invest what you’re not prepared to lose,” said Ben Weiss, co-founder and CEO of CoinFlip, one of the largest bitcoin ATM companies in the United States.

“If you like dogecoin and think it could be a viable currency in the future, or if you’re a fan of the idea and the movement, go ahead and invest in it,” he said. “If you don’t like it or think it’s a fad, don’t invest in it.”

He also cautioned new cryptocurrency buyers against diving directly into dogecoin without investing in other coins. Bitcoin has a 10 year history at this point, which puts it at a different level of risk than investing in a new alternative coin.

And investors shouldn’t go into dogecoin just to make a profit in a short period of time.

“If part of your brain is like, ‘This is a great way to make money fast’, this is when you should think twice,” he said. .

Buy for the long term

Of course, Weiss is a proponent of investing in cryptocurrencies and dogecoin, and he recommends all investors to hold digital coins, even if it is only a small portion of their wallet. .

“You never want to totally miss it,” he said. “You always hit yourself harder for the things you don’t and the opportunities you miss.”

Those who wish to invest in different digital coins should assess their position against other personal finance and investment goals to determine if they have additional money to invest in a risky asset.