Dogecoin, boosted by the likes of Elon Musk and Mark Cuban, rose more than 110% on Friday before falling 26% on Saturday, according to CoinMarketCap.com. It now has a market value of more than $ 36 billion and is still 13,400% higher than a year ago when it traded for $ 0.002 and was worth about $ 250 million.
Demand was so strong for the sign that investors who wanted to trade it on Robinhood crashed on the website, the online stock exchange said in a blog post on Friday. About $ 68 billion in Dogecoin has changed hands in New York over the past 24 hours of Friday 4:45 p.m., the most since June, data from CoinMarketCap.com showed.
The rise of Doge is part of the rise in altcoins, a term for all the digital tokens that have emerged in imitation of Bitcoin. Like most of them, its use case is limited, making it a tool for speculators and raising concerns that a bubble is bursting in a crypto-world now worth more than $ 2.25 billion.
‘It reminds me of the dot com days. We knew something big was going on, and many investors were chasing it hard. This led to a bubble, “said Scott Knapp, chief market strategist at CUNA Mutual Group. For every Amazon.com there were 10 pets.com that went bankrupt. Is Dogecoin the pets.com of the cryptocurrency era? “
Interest in crypto is growing again as companies from PayPal to Square have begun enabling transactions in Bitcoin on their systems, and Wall Street businesses such as Morgan Stanley have begun giving the tokens access to some of the richest customers. All the while, crypto-hards who say that blockchain technology will re-operate the financial community have plugged crypto and become rich in the process.
The Shiba-Inu-themed Dogecoin was created in 2013 as a joke by software engineers Billy Markus and Jackson Palmer. Musk caused a riot earlier this year when he posted a photo of faux magazine “Dogue” with a dog in a red sweater. .
But Michael Novogratz, CEO of Galaxy Digital Holdings, does not buy the hype, as Dogecoin ‘does not really have a purpose’.
“It’s reminiscent of GameStop,” he said in an interview with Bloomberg TV, referring to the stock mania that gripped the markets in February. “I would be very, very worried if one of my friends invested in Dogecoin at these prices.”
With little support for the purchase of cryptocurrencies, the likelihood of it cratering is still high, making novice traders who have jumped on the hype vulnerable to strong losses.
“The government has now pumped so much monetary and fiscal stimulus into the economy, even offering worthless assets,” said Michael O’Rourke, chief market strategist at JonesTrading.
Yet the popularity of alt-currency is hard to ignore. Although Bitcoin is worth more than $ 1 trillion, the total market value of the token universe is now more than $ 2.25 trillion, according to CoinGecko.com, which tracks more than 6,700 coins.
According to OKEX Insights analyst Robbie Liu, Bitcoin’s dominance has declined by 28% since the beginning of the year, citing data from Tradingview. The waning influence began to accelerate this month, he said in an email on Friday, and Bitcoin now accounts for less than 54% of crypto market capitalization – the lowest level in nearly two years.
“On the altcoins front, we are still seeing strong momentum,” Pankaj Balani, CEO of Delta Exchange, a leading exchange for crypto-derivatives, said in a letter on Thursday. that “decentralized exchange coins will be in focus over the next few days, as the market has ratified Coinbase at a valuation of $ 100 billion.”
Other signs with shaky or no fundamentals are also rising. Cardano and Polkadot, both in the top 10 cryptocurrencies by market capitalization, rose this week.
“Polkadot and Cardano currently have very few ‘users’,” Shashwat Gupta, founder of Altcoinbuzz.io, said in an email on Wednesday, although he added that a significant amount of development was being built on it.
And Coinbase CEO Brian Armstrong seems to have taken a stand when he said after the listing that it was a “shift in legitimacy” for crypto.
The Coinbase listing “will ultimately yield more ‘use cases’ for cryptocurrencies and should grow the crypto market,” said Edward Moya, senior market analyst for North America at Oanda Corp.