Dogecoin (DOGE) Is Up More Than 350% in 2024, but That Doesn't Make It a Wise Investment

I can't believe I'm writing this, but 2024 is almost over. During the past 11 months, the capital markets have been influenced by all sorts of things -- from artificial intelligence (AI) to a presidential election.

Despite the prospect of Dogecoin (CRYPTO: DOGE) continuing to soar in value, investors are advised to steer clear of the meme coin due to its risky nature.

What Happened: Dogecoin has surged more than 350% in 2024, outpacing the performance of Bitcoin and Ether. The token began the year trading at around $0.005 and reached a high of $0.023 on Dec. 12.

Dogecoin’s rise can be attributed to several factors, including the presidential election, the performance of Bitcoin and斯克币, and the narrative around a new government agency.

After predicting Dogecoin’s price surge in September, Motley Fool contributor Adam Spatacco made the case for avoiding the meme coin.

“The biggest reason investors should avoid Dogecoin is because it’s a meme coin. As I pointed out, the primary reason Dogecoin’s price has risen as of late all stems from rumors of a new government agency led by Musk and funny memes that have fueled this narrative online. In other words, Musk’s D.O.G.E. has nothing to do with Dogecoin itself. At the end of the day, the price of Dogecoin is completely disconnected from anything tangible.”

Why It Matters: Dogecoin’s price is surging on the back of a narrative that is completely separate from the meme coin itself. The token is rising due to the internet hype and rumors around Musk and his team.

Investors are buying Dogecoin because they believe the price will continue to rise, not because they are interested in the fundamentals or technology of the meme coin. This type of buying is unsustainable and could lead to a sharp decline in the price of Dogecoin.

Spatacco remained skeptical of the long-term prospects of Dogecoin, despite the narrative that could continue to propel the meme coin higher in the short term.

“In my eyes, Dogecoin is an abnormally risky investment opportunity wrapped inside the already speculative nature of cryptocurrency. I would pass on investing in Dogecoin and allow the internet-driven hype to play out. This time next year, I wouldn’t be surprised if the price of Dogecoin has retreated considerably.”

DOGE Price Action: Dogecoin trades at $0.022 at the time of writing.