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Bitcoin rival XRP and ‘meme’ currency Dogecoin both skyrocketed on Monday as amateur investors dropped new assets in the wake of the GameStop saga and Elon Musk boosted interest in cryptocurrencies.
XRP rose as much as 50% before suddenly falling again. It was last 21.27% higher at $ 0.59668 per coin at 07.50 ET.
Dogecoin was up 28.36% at $ 0.03929 after falling sharply from a high of more than $ 0.07 on Friday. Bitcoin, the largest cryptocurrency by market value, fell 0.89% to $ 33,726.
Last week, day traders on the Wall Street Bets Reddit forum skyrocketed the shares of video game store GameStop in an attempt to squeeze hedge funds that have invested against the stock – and to make themselves a lot of money.
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The army of amateur investors appears to have closed on a wider range of targets on Monday, with silver reaching its highest level in 8 years, and XRP and Dogecoin both jumping.
XRP is a cryptocurrency and digital payment network created by the American firm Ripple. It tumbled last year after the Securities and Exchange Commission filed a lawsuit against Ripple for allegedly making an unregistered security offer, which Ripple denies.
Dogecoin is a “meme” cryptocurrency that was created in 2013, apparently as a joke, but which has gained a growing following. A crypto-currency is a secure digital currency, often without a central controlling authority.
Tesla founder Elon Musk has encouraged the recent increase in interest in cryptocurrencies. In a Sunday night video on the Clubhouse app, Musk said it would be funny if ‘Dogecoin becomes the Earth’s currency in the future’.
Read more: As Redditors flood the stock market, UBS is breaking out 6 options that investors can currently use to protect their portfolio
Part of the XRP price increase was driven by a joint effort among fans of the currency, reflecting the GameStop phenomenon. A group in the messaging app Telegram called Buy & Hold XRP reaches the maximum threshold of 200,000 members.
Yet the strategy seemed shaky shortly after 07:00 ET as the price fell sharply. One Reddit user said, “Okay, I want to know who did this. Who dropped xrp from 74 cents to 60? I’m not angry, I just want to talk.”
Naeem Aslam, market analyst at Avatrade, said retailers ‘like’ XRP as it is cheaper than Bitcoin but has a fairly large market capitalization.
“As [Ripple] “If he wins his case against the SEC, we can see serious upward movements for the XRP,” he said.