A group of worried investors in general and the promising developments with a competing cryptocurrency segment have caused the value of Dogecoin (CRYPTO: DOGE) to fall sharply on Thursday. This OG meme coin plummeted late that afternoon, decreasing nearly 14% in value as of 4 PM Eastern Time. In contrast, the stock market was not affected as much, with the S&P 500 index closing the day down 0.5%.
The Pain of Trade War
The trade war between the United States and its major trading partners erupted on Thursday, and there is no immediate end in sight. This conflict is not favorable for speculative assets like cryptocurrencies in general. Dogecoin – not as useful as a coin or blockchain as an increasing number of altcoins – is highly speculative even among other cryptocurrencies.
On Thursday, it was reported that imports of goods produced overseas have plummeted month by month in April, indicating that the dispute is having a tangible impact on the structure of the domestic and global economy. Investors tend to prefer stable and predictable developments in both, rather than strong fluctuations.
Exacerbating the problem for Dogecoin and other meme coins, the cryptocurrency world seems to be focusing more on ( and being more enthusiastic about ) stablecoins. On Thursday, reports indicated that Arizona Senator Ruben Gallego stated that up to 16 members of his Democratic party in the chamber could vote to approve the stablecoin bill currently being discussed by the agency.
If passed, the U.S. Stablecoin Innovation and Regulatory Act (GENIUS) will establish a set of rules and regulations governing such cryptocurrencies.
Avoid Dogecoin
Although I think Dogecoin has a chance of a short-term recovery because it is a long-standing popular meme coin, to me, it is too volatile and unpredictable as an investment to put money into. I also don’t think the trade war will end anytime soon, and it seems that the focus on cryptocurrencies will continue to shine on stablecoins for a while. I will leave Dogecoin alone for the time being.
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