How To Buy Dogecoin (DOGE)

1. Choose a crypto exchange or broker

There are two options when it comes to buying crypto: a crypto exchange or a crypto broker. The two might seem quite similar on the surface, but there are subtle differences that impact which one is best for you. 

An exchange is a platform on which buyers and sellers can trade cryptocurrencies directly. Similar to online share trading platforms, these are most suitable for DIY investors who want to manage their investments themselves. 

A broker, on the other hand, is an interface that interacts with exchanges on your behalf. Some brokers will assign you an account manager, giving you direct contact with someone who can answer your questions and walk you through the investment process. As a result, brokers typically have higher fees than exchanges.

If you decide to go with a broker, be aware of the rules around moving your assets off the brokerage platform. Some brokers don’t allow you to move your holdings out of your account, which is typically a red flag in the eyes of most crypto investors. 

Moving crypto assets into a private wallet, especially a hardware wallet, enables investors to adopt security best practices and the self-custody ethos strongly advocated in the crypto industry.

2. Choose a Payment Method

Most exchanges let you add funds to your account from your credit or debit card, bank account, crypto wallet or other payment service. Transaction fees may apply, and your payment method may have a bearing on the amount you’ll pay.

When you use a credit card, the card issuer treats it as a cash advance, which is subject to a higher rate of interest than a normal purchase.

3. Buy your DOGE

Within your chosen exchange or broker, find the DOGE market and decide on the amount you would like to invest. You can then place either a market order or a limit order.

A market order will execute immediately, buying your DOGE at the market rate immediately. A limit order works slightly differently, allowing you to choose the price at which you want to buy. 

It is important to note that if the price you set the limit order at doesn’t get hit, your order could sit dormant until it expires. In this case, you will not receive any DOGE but you will still keep your initial capital.

4. Select Secure Storage

It’s important to note that crypto is not regulated in Australia by the Australian Securities and Investments Commission (ASIC) because cryptocurrencies are not considered to be financial products. This means you would not be entitled to reimbursement if your DOGE were stolen, you lost your access codes, or if the exchange/broker in question went bust.

A broker might not provide any choice about where your DOGE is stored, but with an exchange, you’re free to store it in your own private wallet– whether ‘hot’ or ‘cold’.

Hot wallets are stored online, making them more convenient for day-to-day access but also more exposed to hackers.

Cold wallets are external storage devices such as hard drives or solid-state drives. They’re arguably more secure, but if you were to lose your own access codes, there may be no way for you to ever access your assets. Taking care of your private keys is paramount if you decide to store your crypto assets in a private wallet.

Whichever you choose, you may be charged a fee for exporting your DOGE to an external wallet.

Before diving into the volatile world of memecoins, it’s important to understand what you’re getting into. 

Dogecoin started as a joke, a literal meme, but quickly gained a strong community of crypto investors which has endured over many years. Unlike traditional investments or even other cryptocurrencies that might be backed by tangible assets or promise utility, Dogecoin’s value is heavily influenced by cultural phenomena and narrative. Its price can swing wildly based on social media trends, celebrity endorsements from the likes of Elon Musk, or the broader crypto market sentiment, making it a particularly volatile investment.

Investing in Dogecoin, therefore, requires a different approach. It’s less about analysing financial statements or technological innovations and more about keeping a pulse on cultural movements and the sentiment within the crypto community. 

While this can lead to a more exciting form of investment, with prices driven by narrative and speculation, it also comes with significant risks. The very factors that can cause Dogecoin’s value to skyrocket can also lead it to an even more rapid plummet. Prospective buyers should weigh these considerations carefully, ensuring they are comfortable with the level of risk and the speculative nature of such an investment. Remember, like any investment, never put in more than you can afford to lose.

Buying shares in a company that operates in or adjacent to the blockchain or crypto industry is another way that investors can gain access to the growth of cryptocurrency. If you play it right, this is almost like a “picks and shovels” style investment that is reminiscent of the gold rush, and also allows for cryptocurrency exposure through your online share trading account. 

Nvidia (NVDA), for example, manufactures graphics processing units used by cryptocurrency miners. Coinbase (COIN), meanwhile, is a popular crypto exchange that allows users to buy, sell and trade cryptocurrencies.

There are many publicly listed companies that have some connection to the digital asset sector, particularly on US stock markets, giving investors a range of options to get exposure to crypto by investing in shares. 

There are also now crypto exchange-traded funds (ETFs) that track the prices of cryptocurrencies directly. For example, BTC and Ether ETFs are listed on Cboe Australia, which investors can access via their share trading platform or broker.

While shares do offer a more familiar path to investing in cryptocurrencies, it doesn’t mean they are any less volatile. Be sure to do your research and ensure that the stock you picked fits into your personal investment portfolio given your financial goals. If you are ever unsure, it is always recommended that you speak to a professional financial advisor. 

Disclaimer: Nvidia and Coinbase are used for illustrative purposes only. This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class.  Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.