Dogecoin prices reached an everyday price high on Tuesday with a market capitalization of more than $ 50 billion, after fans of social media used hashtags to spark a rally in the meme-based cryptocurrency.
An 8,000% price increase this year has led Dogecoin, launched as a satirical critique of the 2013 cryptocurrency, to use more cryptocurrencies such as Tether to become the fifth largest currency.
While Dogecoin, whose logo features a Shiba Inu dog in the middle of the meme, is only a fraction of bitcoin’s $ 1 trillion value, it can be traded on crypto exchanges and more popular mainstream trading 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.
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 car that is popular in crypto culture.
ONLINE TRADING
The rise of Dogecoin came amid an increase in online trading of stocks and crypto by retail investors, who are sitting at home with extra cash due to the COVID-19 pandemic. This did not coincide with the growth in the use of the coin for payments or in trade.
The same trend has spurred a surge in the use of online trading programs like Robinhood, and has also fueled the social media-driven rally in GameStop Corp (GME.N) shares that pitted small investors against hedge funds earlier this year.
“This is an extension of the same phenomenon that has led to Tesla shares being valued far more than the basic values, and more recently to the short-lived pressure of GME (GameStop),” said Ajit Tripathi, head of institutional affairs at Aave , decentralized financing.
As with other cryptocurrencies, Dogecoin’s price is strongly influenced by social media users, including Tesla (TSLA.O), chief Elon Musk, whose tweets about the cryptocurrency rose more than 60% in February has.
“If it goes according to plan and everyone, including Mr. Musk, goes ahead and just pours money into Doge on April 20, Doge will achieve prices that were not even conceptual in the beginning,” a TikTok user said in a video said promoting the coin.
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