Is Dogecoin Considered A Stock?

Categories: Market News | Published by: cryptoevent

19/04/2021

Dogecoin is not a stock, it is a currency that uses blockchain technology. It is similar to the US dollar in digital form. Dogecoin trading is similar to Forex trading.

Shares are traded on an exchange like NASDAQ or NYSE, while dogecoin is traded on cryptocurrency exchanges like Bittrex, Kraken, Binance, etc. Since dogecoin is not a stock and cryptocurrency exchanges are not regulated, you should do your research before trading dogecoin.

In addition, the shares are issued against the company. Each share gives us a fraction of the ownership of the company. If we believe the company has growth potential, we buy and hold the stock. If, on the other hand, we believe that the company could go bankrupt, we will take a short position. Our entire capital investment is dependent on the future growth of the business.

Dogecoin on the other hand is not backed by gold, silver, or even the US dollar. Dogecoin gives us nothing. It’s money, not capital. Dogecoin has value because people believe it has value. If we buy and hold Dogecoin, we can benefit if more people buy Dogecoin and the price rises.

We open a trading account to trade on the stock market. Each securities account is insured by the FDIC and the SIPC. So if the brokerage goes bankrupt or gets hacked, our investment is covered by the FDIC and SIPC. On the other hand, we have not seen any cryptocurrency exchanges offering investments in cryptocurrencies to users.

For example, one can buy Dogecoin with Robinhood. However, there are two separate companies under Robigne:

Robinhood Financial, LLC.
Robinhood Crypto LLC.

Robinhood trades all of its stocks and options through Robinhood Financial LLC. This firm is a member of FINRA/SIPC and all your investments are insured up to $500,000. So if Robinier goes bankrupt, for any reason, you will receive up to $500,000 from this insurance company.

However, when you trade Dogecoin on Robinhood, these transactions are handled by Robinhood Crypto, LLC. Robininity keeps all your cryptos in this company. Robinhood Crypto is not a member of FINRA/SIPC and your crypto investments are not insured. So, if Robinhood suffers from a major hack or server failure and fails to recover its servers properly, you may lose your entire crypto investment.

Every trading platform that allows you to buy and sell crypto has these two corporate structures, as does Robinhood.

Webull and Robinhood work the same way. The only difference, however, is that Robinhood is an American company and Webull is a Chinese company.

The exchange of cryptographic information is not regulated. Be careful when sharing your confidential information.

The crypto currency exchange Binance is a Chinese company. We don’t use it because we don’t feel comfortable sharing our social security number, driver’s license, and home address with a company that has ties to the PAC.

Don’t store your cryptos on an exchange either. Take them to your offline or cold wallet for extra security. If the exchange gets hacked, you lose your entire investment.

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