Dogecoin Is A Dangerous Speculative Joke Controlled By Whales: Report

The Dogecoin DOGE/USD blockchain sees little use, and on-chain data suggests that it is largely controlled by a handful of wealthy entities.

What Happened: According to a Motley Fool report, Dogecoin's "blockchain is a ghost town compared to other cryptocurrencies in the market cap top 10.

The report claims that "almost no one's using Dogecoin."

Per the report, despite the coin being the seventh biggest crypto by market cap, it only recorded just over 23,000 daily transactions on Aug. 9, while Ethereum ETH/USD reported 1.2 million and Bitcoin BTC/USD roughly 200,000. Even Bitcoin Cash BCH/USD and Litecoin LTC/USD — neither of which are part of the top ten — purportedly recorded 83,000 and 133,000 transactions, respectively, on Aug. 8.

Dogecoin reportedly "has one of the most lopsided wealth distributions in the crypto space," with one address accounting for 28% of all DOGE and the top eleven addresses holding 46% of the circulating coins and the top 82 addresses 64%.

Dogecoin users transferred $5 billion worth of coins on Aug. 8, while Ethereum users moved $8 billion — despite the transaction count being significantly lower.

The report warns that Dogecoin's purported centralization poses a serious risk to its investors since its "centralized supply effectively creates a small cabal of players with [...] the ability to dictate the Doge price at will."

The risk is exacerbated further by the fact that the average investor may allegedly confuse the coin's popularity with legitimacy.

Overall, Dogecoin purportedly has no active development team and no major applications.

Consequently, according to The Motley Fool, the absence of a use-case and long-term prospects result in it just rising and falling based on the actions of few wealthy individuals.

When those individuals sell, "the average investor is likely to be left nursing heavy losses."

This is the reason why the report suggests that Dogecoin is "a very risky, speculative vehicle, and not a viable long-term investment."