Dogecoin Price Stuck at 200-Day Average, Fees Eating into Gains
Dogecoin (DOGE) is trading at $0.0927 on October 3, its price sitting on its 200-day average. The 200-day average is a significant technical indicator that many market participants use to determine the direction of a cryptocurrency's price trend. In this case, the 200-day average is currently around $0.093, and the nearest resistance level is at $0.10.
The route to buying Dogecoin in Germany is also significant, with two main options available: exchange-traded security (ETP) on Xetra or a direct purchase through a trading platform. The ETP option comes with a 2.50% annual fee, while a direct purchase has no ongoing fees. However, a direct purchase does come with a one-time fee when the investor decides to sell.
The current price of Dogecoin is 87% below its all-time high of $0.7316, which was set on May 7, 2021. This means that anyone expecting a return to this level would need to see an eightfold increase in the price. While this is possible, it's essential to consider the running costs of a position, particularly with a long-term investment.
On October 14, the trading window for the Bitwise fund BWOW closes, and after that, a valuation-date price will decide the value of the remaining shares. The fund's manager is expected to wind up the fund, which could lead to a payout in cash rather than Dogecoin coins. This is a crucial aspect to consider for investors, especially in terms of tax implications.
For investors in Germany, the key information document is essential in understanding the product and its fees. The total expense ratio for the 21Shares product is 2.50% a year, which is taken daily and pro rata out of the backing holding. This means that each share holds slightly less Dogecoin with every passing day.
Over time, the cumulative cost of the ETP fee can be significant, with a stake of €10,000 losing €250 after one year, €731 after three years, and €1,189 after five years. While this may seem like a small price to pay, it's essential to consider the impact of these fees over the long term.