Dogecoin ( DOGE -0.61%) has been on the rise this week, climbing 13.4% as of 6:03 p.m. ET on Thursday, compared to its value at 4 p.m. last Friday. This increase coincides with gains in the S&P 500 and the Nasdaq-100 , which have risen by 1.1% and 1.6%, respectively.
Generally, the broader crypto market, including Dogecoin, tends to follow the direction of Bitcoin. Although this pattern isn't guaranteed every time, it's usually safe to assume that a strong performance from the leading cryptocurrency will also benefit meme coins like Dogecoin.
This is exactly what's happening now. Bitcoin has surged nearly 10% this week as investors respond to concerns over a potential U.S. government shutdown. Often referred to as "digital gold," Bitcoin becomes especially appealing during uncertain times.
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Dogecoin carries significant risk
Even though Dogecoin frequently benefits when Bitcoin's price increases, their long-term values are not closely linked. Dogecoin is a highly speculative asset, with its price largely influenced by market excitement. It was never intended as a serious investment, and it still shouldn't be viewed as one. With meme coins like Dogecoin, prices can collapse suddenly and dramatically.
Over the long term, Bitcoin remains a far more reliable option.
