When I last wrote about the cryptocurrency in early March, I advocated for creating an exchange-traded fund (ETF) that holds all the major and not-so-major cryptocurrencies. That way, conservative types such as myself, who have never considered buying Dogecoin or any other cryptocurrency for that matter, could do so with less trepidation.
So far, all we’ve got are some pending applications in the U.S. and a couple of Canadian options. But they’re all zeroed in on Bitcoin (CCC:BTC-USD) in much the same way gold funds hold the physical asset and nothing else.
Until a diversified ETF happens, investors are forced to decide if anything other than Bitcoin makes sense in their portfolios.
However, a news story I just read highlights why Dogecoin could make sense in certain instances.
Use Dogecoin to Pay for Your Team’s Jerseys
On March 9, Wooter Apparel, a company specializing in customized team jerseys and uniforms, announced that it would now accept Dogecoin as an alternative form of online payment.
This isn’t the first time the direct-to-consumer sports apparel company’s had a relationship with cryptocurrency. In 2015, Wooter began accepting Bitcoin payments. It even partnered with Coinbase to give customers $10 of Bitcoin when they signed up with the digital currency exchange.
“Wooter now believes crypto and blockchain technology can help facilitate global payments, and that news couldn’t come at a better time as sports starts to ‘open back up’ on a local, regional, national, and international level,” Wooter stated in its March press release.
Wooter’s apparently done customized apparel for all sorts of athletes and celebrities such as former NFL player Terrell Owens and rapper Snoop Dogg.
It got me thinking. My wife’s business partner is a big sports fan: football, hockey, basketball. I don’t think there’s a sport he doesn’t follow. His son played hockey, so I’ll go with that.
The price of 10-25 jerseys is $59.99 each, or $600 plus tax for 10. I could get some for all their employees. Paid for with Dogecoin.
But here’s the best part.
If I bought $50 of Dogecoin at the end of December, today I’d have the $600 to complete my transaction. You don’t get that kind of appreciation with the U.S. greenback.
Of course, it could have gone the other way, and I’d have to use some more of my greenbacks to cover the order.
The Bottom Line
The cryptocurrencies that can provide investors with utility will be the big winners 5-10 years from now.
Years ago, the Diners Club charge card was created by Frank McNamara after the businessman forgot his wallet at a New York City restaurant. McNamara created the multipurpose charge card so that he would never be in that kind of situation again.
It gained traction because it provided utility for its members. Dogecoin could be the modern version of the Diners Club credit card.
InvestorPlace contributor Tezcan Gecgil recently suggested that the cryptocurrency surge should provide Dogecoin with a tailwind throughout 2021 and possibly beyond. Obviously, Elon Musk’s support for the meme cryptocurrency has helped pump air into Dogecoin’s tires.
However, she finished her March 22 article by arguing that unless cryptocurrencies such as Dogecoin move beyond speculation to providing real utility, the 1,200%+ returns seen in recent months will surely disappear.
InvestorPlace’s Chris MacDonald recently went further, suggesting that the cryptocurrency is nothing but a joke, pointing to the fact one of Dogecoin’s founders — Billy Markus — actually left the project in 2015, selling all his crypto in the process, skeptical of its financial underpinnings.
If that’s the case, it sounds like I might have missed my opportunity to have Dogecoin comp my jersey order. Or maybe its price is headed to the moon.
Either way, you know Dogecoin’s price movements in the weeks ahead will be volatile.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.