Dogecoin (DOGE) is, without a doubt, the top-performing asset of the year. However, many are wondering whether DOGE is truly going big, or if it is just a temporary reaction to all the exposure it had in recent months.
This is actually one of the hottest topics in crypto right now, and even Oxford Risk’s head of behavioral finance, Greg Davies, recently spoke of it in a CNBC interview.
Crypto trading is a fad, says Davies
During the interview, Davies spoke of crypto trading, as well as DOGE itself, calling it a fad for many people — a fun thing to get involved with, as it is currently surging and attracting attention. He believes that people are latching on to an opportunity, which seems particularly attractive now, as there is still a lot of uncertainty due to COVID-19 and global finance.
He believes that people are looking to be involved in something that is growing, popular, positive, and just feel like they are winning at something. At the bottom of this behavior is simple hope for something that is performing well during the period of great uncertainty.
Two groups of Dogecoin investors
When it comes to DOGE specifically, he believes that there are two classes of investors — those who truly believe that the coin is heading for the moon, and those who plan to exploit the enthusiasm and faith of the first group in order to make money.
This second group are not long-term investors, but traders who find it fun to participate in a trend and make money off of it, more recreationally than anything else.
Finally, Davies said that it is important to differentiate good investing decision making and piling on an asset just because it provides a sense of belonging.