Investors have a lot to be thankful for over the past 11 months. Since hitting the bear market low on March 23, the benchmark S&P 500 and tech-focused Nasdaq Composite have returned 73% and 96%, respectively, through Feb. 23, 2021.
Yet, neither figure comes close to matching the returns seen in most brand-name cryptocurrencies. For example, Bitcoin, the largest digital currency by market cap, has gained nearly 620% through Feb. 23 since the March 23 bottom for the stock market.
But even Bitcoin has been left in the dust by one supercharged digital token: Dogecoin (CRYPTO:DOGE). Dogecoin has gained almost 1,050% year-to-date, and is up just shy of 2,000% on a trailing four-month basis.
Dogecoin: All bark, no bite
If you’re wondering how an asset can gain more than 1,000% in less than two months, look no further than the power of cult investing on retail boards like Reddit or social sharing platforms like Twitter. Similar to how the WallStreetBets community on Reddit banded together to take on the perceived big money in heavily short-sold stocks, retail investors on Reddit’s SatoshiStreetBets board stuck together and piled into the exceptionally low-priced Dogecoin. It even received support from Tesla Motors‘ CEO Elon Musk, who pumped up the alt-coin via a series of tweets.
The problem is that Dogecoin was a joke from the get-go, and there’s nothing about its utility that’s going to change that. It was created in a matter of hours in 2013 by two engineers who thought it’d be funny to splice the two hottest things on the internet — cryptocurrency and a Shiba Inu dog meme — into one.
It can be bought and sold on select crypto exchanges, but has very limited utility. This is to say that only a fractionally small percentage of businesses accept it as a form of payment.
In other words, it has all the characteristics of a pump-and-dump asset, with the dump coming up at some point in the future.
Dump Dogecoin and put your money to work in stocks with staying power
Instead of investing your hard-earned money in a digital joke, consider putting it to work in businesses that have tangible long-term growth prospects and offer healthy upside. Here are three of the smartest stocks you can buy right now.
If you really have an inescapable itch to gain cryptocurrency exposure, ancillary stocks like payment facilitator Mastercard (NYSE:MA) would be a smart bet. Mastercard recently announced that it would begin supporting a handful of cryptocurrencies on its network later this year.
However, the game-changing potential for Mastercard remains its cashless payment facilitation. Since a majority of the world’s transactions are still conducted in cash, Mastercard’s runway to expand its payment network into underbanked regions of the world could lead to multiple decades of high single-digit to low double-digit growth.
Mastercard’s operating model is…