Dogecoin is making headlines after President-elect Donald Trump announced the creation of the Department of Government Efficiency at X this past Wednesday.

This meme coin was worth 16 cents on Election day and has since more than doubled to a high of nearly 39 cents earlier today. However according to CoinMarketCapit is still less than half as valuable as its all-time high of nearly 69 cents in May 2021.

This unofficial department shares the same acronym as the cryptocurrency: DOGE. Trump announced that this new advisory department would be led by Elon Musk and Vivek Ramaswamy, a former Republican presidential candidate. Its stated goal will be to look for ways to reduce government spending to “drive large-scale structural reforms.”

This department doesn’t exist yet and probably won’t be launched as an official authority. Establishing an official agency requires an act of Congress.

Read more: How Trump’s election victory could benefit Elon Musk’s Starlink

What does all this have to do with dogecoin?

Musk has been a big proponent of dogecoin through the years. Amid the post-election stock market boom, Musk’s new position as co-head of DOGE sent the cryptocurrency soaring on Wednesday. It has been high with small fluctuations since then.

“Elon Musk’s appointment to run the Department of Government Efficiency, i.e. DOGE, has catalyzed investment in Dogecoin,” said Andrew Lunardi, a digital currency expert and head of on-chain adoption at Immutable, a crypto-asset gaming company.

Musk’s tweets and public statements have helped raise dogecoin’s value earlierand investors and experts like Lunardi expect this trend to continue if Musk promotes the cryptocurrency further in the future.

Dogecoin peaked in May 2021 and then dropped significantly. The value of this cryptocurrency has been relatively flat since the summer of 2022, until it saw a slight uptick in the spring of this year and has since soared.

Cryptocurrency values ​​for other digital coins have surged since Trump’s presidential victory last week. In July, Trump announced at bitcoin conference that he wants to make the US the “crypto capital of the planet”.

Should I invest in dogecoin, bitcoin or other cryptocurrencies?

Investing in cryptocurrency can be risky. It is a very volatile investment instrument. If you’re interested in exploring cryptocurrency like dogecoin or bitcoin, investment experts emphasize researching the market and never investing more than you’re willing to lose.

“Bitcoin (and other cryptocurrencies) have been on a wild ride in recent years, but just because it hit an all-time high after the election doesn’t mean investors should suddenly change their strategy,” said Alex Michalka, vice president. president of investment research at Wealthfront, an investment platform.

Diversification your portfolio to reduce your risk is also generally recommended. If you don’t want to experiment with investing in crypto directly, consider investing a small portion of your portfolio in crypto exchange-traded funds. It is always advisable to consult with a trusted financial advisor before making any changes to your investment strategy.

“I would encourage investors to think of cryptocurrency as just one type of asset class you can include in your long-term wealth-building strategy,” Michalka added.

Why is crypto so volatile?

Cryptocurrencies like dogecoin and bitcoin do not have fully established valuation methods like other stocks and investments. Instead, the price is driven up mostly by hype. We’ve seen crypto rise to all-time highs just because crash into dramatic valleys shortly after. That makes this asset class extremely risky.

“The crypto market has never been a good place to invest. But at times it has indeed been a profitable place for some to speculate,” said Robert R. Johnson, professor of finance at Creighton University.

If cryptocurrency becomes easier to value, and if there is wider adoption, Lunardi suspects that this digital currency will become less volatile. But for now, he warns, it remains a risky asset class.

More investment advice: