Bitcoin and Dogecoin have registered remarkable success in recent years because of their novelty and real-world utility. On the other hand, they also have challenges that could make it challenging to amass huge gains moving forward. Therefore, it is still possible that the two Cryptocurrencies could be millionaire-makers even though not like they have in the past. For example, if you invested less than 2000 USD in Bitcoin when it started trading, you would be a millionaire now!
Additionally, Dogecoin could also have turned you into a millionaire. If you invested less than 2800 USD in late 2013 right now, you would be worth a million dollars. However, that is water over the dam now.
What Are The Keys To Their Success?
To determine whether Cryptocurrencies will be successful in the future, it is essential to understand the factors behind the past success of Dogecoin and Bitcoin. In this sense, there is mainly one common factor behind the two Cryptocurrencies – their newness.
For example, Bitcoin was the first cryptocurrency in the world. On the other hand, the idea of a blockchain was not there before Bitcoin. Conversely, Dogecoin had a different kind of originality factor. It was also a fun alternative to Bitcoin. The cryptocurrency’s logo (the Shiba Inu dog on its logo) became a favorite meme for many internet users.
Additionally, Elon Musk’s tweets and support also contributed significantly to Dogecoin’s popularity. Musk owns Dogecoin, Ethereum, and Bitcoin. However, novelty does not go so far. The two Cryptocurrencies also got adoption that goes beyond trading.
Bitcoin is the biggest winner in this sense. Currently, over 15000 businesses accept Bitcoin as a form of payment. On the other hand, Dogecoin is not widely accepted by merchants globally in the same manner as Bitcoin. But, it has gotten some more support recently. For instance, it is used for tipping on Twitter and Reddit.
What Are The Challenges?
The current and future challenges that Dogecoin and Bitcoin face are directly related to the factors behind their previous success. For instance, the Cryptocurrencies are no longer what they used to be as they have lost their novelty factor.
Besides that, many other Cryptocurrencies have emerged. Also, these Cryptocurrencies are not willing to play second fiddle; they are determined to become the next big thing in the crypto world. These Cryptocurrencies offer a direct threat to the growth of Bitcoin and Dogecoin because they are no longer the only options. You can click here to view more about Bitcoin and Dogecoin.
Findings from a recent study also suggest that Bitcoin faces competition to its status as the best cryptocurrency for hedging against inflation. According to the research, Ethereum is likely to be a better inflation hedge than Bitcoin.
The other challenges that the Cryptocurrencies face include:
- Volatility. Since Bitcoin hit the market, it has been incredibly volatile. This factor has led to mixed reactions from industry experts. Some claim you could pay as high as a million for BTC coins, while others claim the price could go down to zero. This challenge makes it challenging for the Cryptocurrencies heading into the future.
- Scalability. Bitcoin’s underlying technology limits the amount of information that each block can contain to 1 megabyte of data. This restriction means there can only be three transactions per second. As a result, if more transactions are performed, the network will find it challenging to keep up the records leading to severe processing delays.
- Tax challenges. At the moment, the law categorizes BTC as intangible property. This means that they are subjected to capital gains taxes. Therefore, if you invest in Bitcoin and sell at a higher price, you must indicate the difference in your taxes. On the other hand, each time you make a purchase using BTC, it will be a taxable activity.
Are They Still Millionaire-Makers?
None of the two Cryptocurrencies have a straightforward path to the future as they enjoyed in the past. So, does this mean that they are no longer capable of making investors millionaires? That is not necessarily the case.
Theoretically, any asset has the potential to make one million dollars. However, unlike in the past, you will have to invest a significant initial amount for that to happen. Alternatively, you might have to wait a very long time before your initial investment grows into a million dollars.
In this sense, Bitcoin and Dogecoin could still make their investors millionaires in the long run. But, don’t expect an initial investment of 2800 USD to grow into a million dollars in the next 10 years or even 30 years!
It is apparent that the crypto industry is still trying to find its feet across the globe. There are some challenges it must overcome to reach its target for growth. On the other hand, the number of Cryptocurrencies has increased significantly in recent years. This means that, while Bitcoin and Dogecoin can still make you a millionaire, you might have to exercise patience for that to happen as it will take longer.
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