Dogecoin and Bitcoin may already be in your investment watchlist. But which one has the better investment in 2021 and beyond?
Bitcoin has taken an even firmer grasp of its position as the world’s leading cryptocurrency following a record-breaking price run at the start of the year, but has it been left with any room for further growth?
Anyone looking to invest in cryptocurrency in 2021 needs to consider not only the stability of a coin, but also be able to gauge how much potential it has for significant returns in future. This is where altcoins can often prove to be a better investment choice than Bitcoin.
One such token worthy of consideration is Dogecoin. Usually found just outside the top ten cryptocurrencies by market cap and with a trading price of just $0.05 per token, Dogecoin represents an excellent opportunity for investors who aren’t adverse to a little risk. But how does it really measure up against the big hitters like BTC?
In the following Bitcoin vs Dogecoin comparison, we’ll take a closer look at the technical particulars of each coin as well as see what leading analysts are forecasting for each one’s price movement for the coming months.
Dogecoin vs Bitcoin: A Comparison Between Them
When it comes to market dominance, Bitcoin vs Dogecoin really is no competition, but the altcoin’s rise in popularity - seemingly against the odds - is worthy of note and it continues to garner plenty of attention from both investors and crypto tech heads. So what are the key differences between the two?
Dogecoin vs Bitcoin - The Key Differences
Here are the most important ways the two assets differ:
Background
Bitcoin has transcended the crypto scene and is now more or less a household name. Ever since it was launched back in 2009, the original cryptocurrency has rarely been out of the news as tech insiders speculated on the all but endless possibilities of blockchain technology.
Bitcoin came into being following the publishing of Satoshi Nakamoto original whitepaper. Whilst Nakamoto did not invent blockchain or even the idea of decentralised digital payments, Bitcoin was the first fully realised proposal and the document that really put blockchain on the map.
Originally intended as a democratic peer-to-peer payments system that removed the need for any central authority, BTC promised to significantly disrupt the financial world and many early proponents lauded it as the future of retail and institutional transactions.
The lofty aspirations of Bitcoin may yet to be realised, but at the time of writing, BTC is trading at over $48,000 for a single token and is one of the hottest assets for investment in the world.
In fact, considering that those who chose to invest in Bitcoin early on saw returns of several thousand percent over the next ten years, it’s hard to name any other financial assets that have given anywhere near such impressive returns.
Dogecoin is nothing if unconventional - in fact, the coin was originally created for a joke as a way of satirizing the cryptocurrency hype. Launched in 2013 and developed by Jackson Palmer and Billy Markus, the coin was instantly recognisable as it used the image of a Shiba Inu dog as its logo.
However, despite its lighthearted beginnings, it turned out that the Dogecoin blockchain actually had plenty to offer, having been developed based on Litecoin’s technology - namely using the latter’s scrypt-based proof of work mechanism.
Within weeks of its launch, the price of DOGE surged by over 300%, as consumers rushed to invest in Dogecoin. It seems the altcoin’s lighthearted approach struck accord with the crypto community at the time and many viewed it as a more consumer-friendly and adaptable version of Bitcoin.
Transactions and Speed
When pitting Bitcoin vs Dogecoin, one of the key areas in which they differ is in how each network handles transactions.
If you have already chosen to invest in Bitcoin, then you may already be aware that the original cryptocurrency’s Achilles heel could be said to be its comparatively costly and resource-intensive block creation time, with the Bitcoin network only able to process around 5 transactions per second. This may sound a lot, but when you consider that Visa can process around 1700 transactions per second, then Bitcoin is really nowhere near rivalling traditional payment methods.
The transaction time comes down to how blocks are created, verified and added to the Bitcoin blockchain. This is done through a process of mining, wherein powerful computers on the network compete to solve complex equations via the proof of work mechanism. These so-called miners are then rewarded for their work with BTC. You can read more about Bitcoin mining here.
This proof of work mechanism has faced criticism from the crypto world as, whilst being extremely secure, it is slower and more costly in processing transactions.
As we’ve already pointed out in our Bitcoin vs Dogecoin comparison, a key feature for any cryptocurrency is the speed in which it can handle transactions. In this area, Dogecoin definitely has the advantage. Despite using the proof of work consensus mechanism - just like Bitcoin - Dogecoin can have blocks added to the network in as little as one minute.
Dogecoin’s blockchain works much in the same way as Litecoin, using an Auxiliary Proof of Work (POW) consensus mechanism. You may notice that this sounds remarkably familiar - and you’d be right, as Bitcoin also uses a very similar process, hence Dogecoin is mined in the same way as BTC. However, there is one crucial difference: whereas Bitcoin uses the SHA256 algorithm, Dogecoin uses scrypt.
Scrypt is the less complicated of the two algorithms and allows blocks to be created at a faster rate, hence Dogecoin outperforms Bitcoin in this area.
Supply and Demand
Anyone looking to buy Bitcoin in 2021, is probably already aware that investment is all about supply and demand - but how does this work when digital currency can simply be created on the network without any underlying asset or intrinsic value?
Inevitably, this is something that the original Bitcoin designers thought of and BTC actually has an in-built deflationary mechanism to create scarcity and potentially increase the value of tokens on the network.
Firstly, the total supply of BTC is hard-capped at 21 million - there will never be more tokens than this. Secondly, as miners on the network compete to solve the block equations, the reward they receive is halved at regular intervals. For example, the reward started at 50 BTC but was cut to 25 in 2013. In 2018 it was reduced to 12.5, and in May of 2020, it was halved again to 6.25. The next halving should take place some time in 2024.
When considering supply and demand, there is a considerable difference between Bitcoin vs Dogecoin. Whereas we have discussed Bitcoin’s deflationary mechanism, Dogecoin is actually an inflationary cryptocurrency - the idea being that a consistent supply of tokens would continue to incentivise miners and keep transaction fees down.
It has also been suggested that the way in which Dogecoin can increase its supply, albeit at a set rate fixed at no more than 5 billion per year., means that the coin is far more viable as a genuine, usable currency than many of its competitors.
However, anyone thinking to invest in Dogecoin should be advised that it is not one of the most widely supported tokens for everyday transactions and most of the demand for Dogecoin comes from its loyal community, many of whom already think of DOGE as a currency in its own right.
Dogecoin vs Bitcoin: Which Is The Better Investment?
Looking at the investment profiles of Bitcoin vs Dogecoin yields a fairly one-sided result. Whilst Dogecoin has defied the odds and continually appears in the top 15 cryptocurrencies by market cap, ultimately the project has not had any major updates since 2015 and it’s difficult to see how it can rival any of the bigger coins in the cryptocurrency market. However, that isn’t to say that Dogecoin can’t still be a good option for those willing to take on a little risk.
If you’re looking to invest in Dogecoin or Bitcoin, then there are a few ways in which you can build a price prediction. Firstly, it’s important to look at the historic price movement of either coin. Then we can use forecasts from leading analytical platforms to get an idea of what is expected from each token over the coming months. Finally, we can also consider what experts are saying about BTC and DOGE.
Bitcoin Vs Dogecoin: Price History
Next up in our Bitcoin vs Dogecoin comparison, we’ll take a look back at each token’s historic price movement, as this often provides clues as to how they react to certain market forces. Previous price performance is also essential for technical analysis, which in turn is how forecasts are generated by the leading platforms, as detailed in the next section.
BTC
Bitcoin’s meteoric price increases have become the stuff of legend in the investment world. Whilst the original crypto traded at pennies for the first few months of its existence, by 2013 it had soared to $1,242 per token - yielding huge returns for those who thought to invest in Bitcoin early on.
It hasn’t all been plain sailing - BTC has experienced numerous bear markets throughout its lifespan, but the overall trend has been one of appreciation, with Bitcoin continuing to astound investors with its stratospheric growth between 2013 and 2017, eventually hitting $19,783.
Bitcoin bumped against the $20,000 barrier for a while, until a bull run at the beginning of 2021 saw BTC smash all its previous records and hit an all-time high of $51,000 dollars per token, driven by renewed investor interest and celebrity backing.
Dogecoin
Looking at the price history of Bitcoin vs Dogecoin, the latter has been somewhat less impressive - in terms of token price at least. The token experienced a significant price surge of around 300% just two weeks after its launch, but this was the most exciting thing to happen for some time and turned out to be something of a one off - the token price of Dogecoin remained less than a cent for several years after this point.
It wasn’t until 2017 that DOGE seemed to shift much at all. Prices started off at around $0.0002, but began to creep up throughout the year, climbing up to $0.0094 by the start of 2018 - hardly an impressive price point, but nonetheless representing significant growth, which is ultimately what those who choose to invest in Dogecoin are interested in.
Things then settled back down for DOGE and the token traded between $0.0025 and $0.0030 for much of 2019 and 2020, until things began to change in the opening weeks of 2021. As price surges took place across the crypto market, Dogecoin’s price surged to an all-time high of $0.082 in February.
Bitcoin Vs Dogecoin: Future Predictions
If you’re planning to invest in Dogecoin or Bitcoin, then price predictions will help you manage your expectations. However, as always it should be remembered that predictions are essentially guesswork - they are by no means guaranteed.
BTC
Most analysts are united in predicting further growth for Bitcoin over the rest of 2021. DigitalCoinPrice, for example, has BTC continuing its record-breaking price run, reaching $80,000 by the summer before dipping slightly and finishing the year on $79,178.
Elsewhere, WalletInvestor is also predicting further appreciation for BTC, albeit at a more subdued rate. According to the platform, Bitcoin will hold its current price of $47,794 for a while, before dipping to around $44,000 before the summer, finally climbing again to reach an average price of $56,465 by December 2021.
Of all the Bitcoin price predictions we have come across, the Economy Forecast Agency seems to be the most optimistic. The platform not only predicts that BTC will hold its recent gains, but also that it will continue to appreciate at an exponential rate, reaching as high as $123,999 by the end of 2021.
Naturally, this will be music to the ears of anyone who has chosen to invest in Bitcoin, but as always, we advise caution - it’s generally better to rely on the more conservative forecasts.
Dogecoin
Those who have chosen to invest in Dogecoin are probably already aware that it represents a much riskier option than Bitcoin. However, that isn’t to say that it can’t be a good addition to a diversified portfolio.
TradingBeasts is predicting steady, if unremarkable growth for DOGE. It has the coin trading at around $0.06 for much of the run-up to summer, eventually climbing to $0.074 in December 2021.
Once again, this may seem like an unimpressive sum, but it represents a return of around 25% in less than a year.
A more optimistic Dogecoin price prediction can be found at DigitalCoinPrice. They have the token fluctuating in price throughout the year, reaching $0.08 in the run up to summer before dipping back to $0.067 in November, then rallying at the end of the year and going into 2022 trading above $0.090.
Finally, WalletInvestor is far more reserved in its Dogecoin forecast. Despite its recent bull, the platform has DOGE going into a period of decline over the summer, before recovering slightly at the end of 2021 and trading at around $0.052 throughout December.
Dogecoin Vs Bitcoin: What the Experts Say
If we’re talking about celebrity backing, then there really is no competition with Bitcoin vs Dogecoin. Bitcoin has plenty of supporters both inside and outside of the financial world. Most notable has been Elon Musk’s expression of support for BTC, with Tesla adding some $1.5bn of the cryptocurrencyto its own investment portfolio.
There have also been numerous other voices of support for Bitcoin, including long-time proponent Mike Novogratz, who remains resolute that BTC can hit $100,000 by the end of 2021. He isn’t alone in this prediction either, both Anthony Pompliano, of Morgan Creek and prominent investor Alistair Milne are also betting on BTC to reach the $100k mark.
So is anyone advising people to invest in Dogecoin? Suffice to say there is much less noise around the altcoin. However, it does have its supporter - not least the before mentioned Elon Musk.
Musk has previously described DOGE as “the people’s crypto” and has tweeted that he supports major Dogecoin holders selling their coins. "If major Dogecoin holders sell most of their coins, it will get my full support," the Tesla CEO tweeted on Sunday. "Too much concentration is the only real issue."
Elsewhere, crypto expert Nic Carter is less optimistic about Dogecoin. He believes that “Unfortunately a lot of retail punters are going to lose money on dogecoin in the long term because there’s really not much there in terms of interesting technology.”
Dogecoin Vs Bitcoin: Conclusion
Ultimately, Bitcoin vs Dogecoin isn’t much of a competition when it comes to market dominance. Bitcoin simply has too strong a hold to be rivalled by the likes of smaller altcoins like Dogecoin. Its notoriety also means BTC is subject to much more significant price movements, whereas DOGE is really reliant on a comparatively small community.
If you’re only going to choose one, then it is probably better to invest in Bitcoin than it is to invest in Dogecoin. However, as analyses reveal, both coins can potentially yield impressive returns in 2021 so both potentially have their place in a diversified investment portfolio.
Bitcoin may be the clear winner in our Bitcoin vs Dogecoin comparison, but Dogecoin’s resilience and continued popularity against the odds are certainly worthy of note and could well see the altcoin emerge as a solid investment for 2021.
How to Invest in Cryptocurrency in 2021
If our Bitcoin vs Dogecoin comparison has prompted you to invest in either currency, you might still be at a loss as to exactly how you go about doing so.
Fortunately, cryptocurrency is one of the most accessible forms of asset there is. All you need to start building your portfolio is a reputable broker, for which we recommend eToro. The advantage of eToro is that you can quickly open an account online and gain access to the cryptocurrency market - as well as forex and CFDs - within moments.
You’ll also find plenty of articles and education resources to allow you to research cryptocurrencies and plan future investments.
Virtual currencies are highly volatile. Your capital is at risk.
FAQ
Bitcoin vs Dogecoin - which is better?
When it comes to market dominance, then Bitcoin vs Dogecoin is no competition. The former is well out in front as the market leader, with no signs of slowing down. However, Dogecoin deserves praise for remaining in the top 15 cryptos by market cap, without much in the way of innovation.
Is Dogecoin still a good investment?
It’s loyal community and continued prevalence as “the people’s crypto” mean that Dogecoin could still be a good investment. However, as always you should only invest what you can afford to lose and manage your expectations wisely.
Where can I buy Bitcoin?
If you’re interested in buying Bitcoin, or any other cryptocurrency, then you’ll need to open an account with a broker or exchange. For novice investors, we recommend eToro, as it offers a user-friendly trading platform as well as plenty of learning materials.
Which crypto should I invest in in 2021?
If you’re planning to invest in crypto in 2021 but are new to the market, then we recommend conducting plenty of research before you start building your portfolio. The cryptocurrency market presents plenty of exciting investment opportunities but it is also notoriously complex - not to mention volatile. Typically, new investors should stick to the top five cryptos - especially Bitcoin and Ethereum, as these are comparatively stable compared to the wider market.