Cryptocurrencies are a relatively new asset class. However, even in a bear market, the industry commands a meaningful market cap of $2.1 trillion. And there are well-known pioneers who have developed significant brand power and recognition among investors.
Bitcoin (BTC +0.88%) is the most valuable digital asset. And it’s been around for almost two decades.
There’s also Dogecoin (DOGE +2.00%), a meme token launched in December 2013.
If you’re looking to invest $500 in cryptocurrencies, which of these two is the better choice?
Image source: Getty Images.
Scarcity matters most
In the past 10 years, Bitcoin’s price has rocketed 8,800% higher (as of June 29). This wonderful performance has occurred even though the digital asset is trading 52% below its record high, set last October. Despite being the first and oldest crypto, Bitcoin still experiences notable volatility.
However, it has a fixed supply of 21 million units. This hard cap has never been altered, which over time has raised investor confidence in Bitcoin’s durability. The market won’t question the token economics.
That scarcity is perhaps the most important attribute, especially given the ever-increasing money supply and federal debt levels. Because Bitcoin isn’t controlled by a central authority, it should be viewed as a neutral asset and network that serves as a hedge against the current fiat-based monetary system crumbling.
What’s extremely encouraging is that companies, undeterred by price action, keep building on Bitcoin. For example, Morgan Stanley launched a spot Bitcoin exchange-traded fund in early April. And BlackRock recently introduced the Bitcoin Premium Income ETF. These financial heavyweights wouldn’t waste their time and resources if they believed Bitcoin wouldn’t become a more important asset in the future.
Today’s Change
(0.88%) $546.56
Current Price
$62427.00
Key Data Points
Market Cap
$1.3T
Day’s Range
$61734.00 – $62821.00
52wk Range
$57945.16 – $126079.89
Volume
23.1B
Community interest in Dogecoin is weakening
Dogecoin’s drawdown is more troubling than Bitcoin’s. The dog-themed token is 89% off its May 2021 peak.
The market shouldn’t count out Dogecoin’s price registering random bull runs, though. The token is influenced by community excitement, which is fleeting and unpredictable. But it can have a powerful impact if bullish sentiment quickly takes hold of investors.
It’s much easier to be pessimistic. The fact that Dogecoin’s price has been in a five-year downward trend is a clear indication that it’s losing interest among investors. Competition from other cryptocurrencies or a lack of any technology edge might be the main reasons for a negative outlook.
Ten years from now, I believe there’s a strong likelihood that Dogecoin will be worth less than it is today. This means that Bitcoin is the smarter option for investors who are ready to put $500 to work.
Source: Original Article
