There are few cryptocurrencies that attract as much intrigue as Dogecoin. Routinely promoted by Tesla boss Elon Musk, the DOGE coin is based on an internet meme of a type of Japanese dog called Shiba Inu, is championed by many amateur investors, and was originally created as a joke version of Bitcoin.
Predictably, Dogecoin is just as volatile as every other type of crypto, reaching an all-time high of over 70 cents in May 2021 per coin before experiencing a 78% drop in May 2022.
If you’re keen to purchase a slice of the action, here’s what you need to know about both buying – and selling – Dogecoin.
Note, however, that authorities, such as the Australian Government’s Moneysmart site, caution Australians to be careful when dealing with cryptocurrency, with some would-be investors falling victim to crypto criminals in recent times.
How to buy DOGE in 4 steps
1. Choose a crypto exchange or broker
Both a crypto exchange and a crypto broker can help you buy DOGE, but the two are slightly different.
An exchange is a platform on which buyers and sellers can trade cryptocurrencies. A broker is an interface that interacts with exchanges on your behalf.
Some exchanges only deal in crypto, so if you’re new to investing and need to use a fiat currency (for example, Australian dollars) to buy crypto, make sure you choose an exchange that accepts it.
If you choose a broker instead, be aware of the rules around moving your assets off a brokerage platform because some brokers don’t allow you to move holdings out of your account. If you wanted to store your DOGE in a crypto wallet for added security, this would not be possible.
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.
Use a credit card and the card issuer will treat it as a cash advance, which will be subject to a higher rate of interest than a normal purchase.
3. Buy your DOGE
Within your chosen exchange, find the DOGE currency option and enter the amount you want to invest.
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 while an exchange might not provide an integrated crypto wallet, you’re free to store it in wallets elsewhere – whether ‘hot’ or ‘cold’.
Hot wallets are stored online, making them more convenient 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.
Whichever you choose, you may be charged a fee for exporting your DOGE to an external wallet.
Alternative ways to invest in DOGE
Buying shares in an organisation which uses or owns cryptocurrencies and the blockchain that powers them is another way to invest in cryptocurrency. If the company is subject to regulatory scrutiny, you may feel this is a more secure way to invest.
Nvidia (NVDA), for example, is a manufacturer of graphics processing units which are used by cryptocurrency miners. Paypal (PYPL), meanwhile, allows users to buy and sell select cryptocurrencies.
Nvidia and Paypal 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 as an investment class.
