Dogecoin price – this is how the Dogecoin price is created
As with the cryptocurrency Bitcoin, both the course and the value of the Dogecoin depend on the supply and demand of its investors. So when demand increases, so does the Dogecoin price. This means that the digital currency Dogecoin is managed decentrally and is not controlled by central banks or governments.
However, as we told you above, there is an important difference between the two cryptocurrencies, specifically related to their price composition. While the total amount of Bitcoins available has so far been capped at 21 million, Dogecoins can be mined indefinitely. On the one hand, it is possible to react to an increasing demand by also increasing the supply of Dogecoins. However, the more Dogecoins there are on the market due to increased mining, the lower their value becomes. That is why Dogecoin is an inflationary currency.
Our recommendation: If you want to learn more about how the price of digital currencies is made up, then you should also read our buying cryptocurrency guide article!
When Dogecoin was split from Litecoin in December 2013, the value of the virtual currency was not quantifiable in other currencies. This has now changed. However, like any other cryptocurrency, the Dogecoin rate is subject to large fluctuations, which also vary depending on the trading platform. So if you want to trade Dogecoin as an investor, you should take into account the high volatility and inflationary nature of the cryptocurrency!