By Anna Irrera, Tom Wilson and Gertrude Chavez-Dreyfuss
LONDEN / NEW YORK (Reuters) – Meme-based dogecoin fell on Tuesday after reaching an all-time high in a wild session, which saw fans of the sign once use a parody of hashtags to use to stir up a rally until it has lost steam.
Dogecoin eventually fell 15.4% to US $ 0.33, but during the session when it reached a record high, its market capitalization rose to more than $ 50 billion. After the slump, market capitalization fell by about $ 45 billion, according to coinmarketcap.com.
By comparison, the hugely popular bitcoin has a market capitalization of over $ 1 billion.
Dogecoin fans have used the hashtags #DogeDay and # DogeDay420 to post memes, messages and videos on Twitter, Reddit and TikTok, referring to the informal April 20 holiday to celebrate cannabis characterized by smoke-in and street parties.
‘GIMME THAT DOGECOIN LAMBO !!! #DogeDay ‘tweeted one, referring to the Lamborghini sports car that is popular in crypto culture.
An 8,000% price increase this year has led Dogecoin, introduced as a satirical critique of the 2013 cryptocurrency, to more widely used cryptocurrencies such as Litecoin and short Tether to become the sixth largest currency.
“The current fervor in retail will not completely give up Dogecoin,” said Edward Moya, senior market analyst at online FX trading platform OANDA, but he did expect the “sell the event response” for the cryptocurrency.
Dogecoin’s logo features a Shiba Inu dog in the center of the meme. It can be traded on crypto exchanges and more popular mainstream programs.
“The Doge rally represents an interesting convergence,” said Diana Biggs, CEO of crypto-startup Valor, after Dogecoin’s price more than quintupled last week to a record $ 0.42, according to CoinMarketCap .
“A meme coin created as a joke for early crypto adopters whose community liked these kinds of things, with now a new generation of retail investors for whom memes are a native,” Biggs added.
ONLINE TRADING
The rise of Dogecoin occurred during an increase in online trading of stocks and crypto by retail investors, who were at home with extra cash due to the COVID-19 pandemic. The currency did not see much growth in use for payments or in trade.
A surge in the use of online trading programs like Robinhood has also fueled the social media-driven rally in GameStop Corp shares, which has attracted small investors against hedge funds.
“This is an extension of the same phenomenon that has led to Tesla shares being valued far more than the basic value, and more recently the short-lived pressure of GME (GameStop),” said Ajit Tripathi, head of institutional affairs at the decentralized financial enterprise Aave, said.
As with other cryptocurrencies, the price of Dogecoin is strongly influenced by social media users, including Tesla CEO Elon Musk, whose tweets about the cryptocurrency raised the price by more than 60% in February.
Dogecoin currently has an implied 16.7% probability of being over $ 1 by the end of 2021, according to bet collectors US-Bookies.com, a significant improvement over earlier this month, when it was just 2.9% % had a chance to do so.
(Reporting by Tom Wilson and Anna Irrera in London; Additional Reporting by Gertrude Chavez-Dreyfuss in New York; Edited by Alexander Smith and David Gregorio)