I can’t depend I’m writing this, but 2024 is almost over. During the history 11 months, the financing distribution markets have been influenced by all sorts of things — from artificial intelligence (AI) to a presidential election.

As always, the trade showcased yet another resilient act — with the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) each boasting total returns of nearly 28% (as of this writing).

But in the background, another resource class hasn’t performed too shabbily, either. I’m talking about cryptocurrency. While bitcoin flirted with the prospect of reaching $100,000 per coin, a different token has grabbed the spotlight.

Dogecoin (CRYPTO: DOGE) is up more than 350% in 2024, and there’s a real chance it could continue rocketing higher. Although it’s tempting to buy dogecoin correct now, I’ll outline one of the primary catalysts fueling its rise and make the case for why investors are best off leaving it alone.

What is driving the worth of dogecoin higher?

On Sept. 11, I published an piece predicting that the worth of dogecoin was about to leave parabolic. Since the day my piece was published, dogecoin has soared by 330%.

I don’t declare this to brag — it’s not like I have a crystal ball and can forecast the upcoming. To me, it was obvious that the worth of dogecoin was about to shatter out.

Why? Because I thought there was a very excellent chance that then-candidate Donald Trump would emerge victorious in the presidential election. Turns out that hunch was correct, too.

Although President-elect Trump has been more of a vocal supporter of Bitcoin, one of his biggest donors and campaign surrogates has long been tied to dogecoin. Of course, I’m talking about Tesla Chief Executive Officer Elon Musk.

While Musk has been more of a tongue-in-cheek supporter of dogecoin, the business owner made a pretty obvious tease tying in the cryptocurrency leading up to the election. Namely, Musk took to social media to promote the creation of a recent government agency should Trump triumph. The name of the agency was the Department of Government Efficiency (D.O.G.E.).

My reasoning was that if Trump did triumph, he would subsequently make an announcement about Musk joining his administration and make D.O.G.E. As such, I figured the worth of dogecoin would rise based on this information. As of now, all of these things have happened — but that doesn’t cruel dogecoin is a sensible financing distribution chance.

Why investors should avoid dogecoin

The biggest rationale investors should avoid dogecoin is because it’s a meme coin. As I pointed out, the primary rationale dogecoin’s worth has risen as of late all stems from rumors of a recent government agency led by Musk and amusing memes that have fueled this narrative online. In other words, Musk’s D.O.G.E. has nothing to do with dogecoin itself. At the complete of the day, the worth of dogecoin is completely disconnected from anything tangible.

Where will dogecoin be in one year?

In the short term, I wouldn’t be surprised to view the worth of dogecoin continue running higher. Between the positive sentiment surrounding D.O.G.E., President-elect Trump’s inauguration inching closer, and the potential for a Santa Claus rally at the complete of December, I ponder there’s a excellent chance that stocks and crypto view another jolt before the complete of the year.

But as always, reality will eventually set in. The concept of D.O.G.E. is fascinating — namely, slashing excess costs in the federal distribution to reduce the deficit. However, I ponder Musk and his throng will arrive to discover that such an attempt is much easier said than done. After all, the incoming Trump administration is not the first to arrive up with such an concept.

While I’m not saying D.O.G.E. is destined to be a setback, I am positing the concept that reducing the federal deficit will receive much longer than most people are probably anticipating. As such, I wouldn’t be surprised to view some of the euphoria surrounding Musk’s aspiration commence to fade — and with it, the worth of dogecoin.

In my eyes, dogecoin is an abnormally risky financing distribution chance wrapped inside the already speculative nature of cryptocurrency. I would pass on investing in dogecoin and allow the internet-driven hype to play out. This period next year, I wouldn’t be surprised if the worth of dogecoin has retreated considerably.

(This narrative has been updated to add a graphic.)

Adam Spatacco has positions in Tesla. The Motley Fool has positions in and recommends bitcoin and Tesla. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering financial information, analysis and commentary designed to assist people receive control of their financial lives. Its content is produced independently of USA TODAY.

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