After just the first month, 2021 has already been defined by politically inspired riots, revolt against the so-called elite hedge fund class and an increasingly influential meme culture driven by a population largely at home during the government’s lockdown over the past year wash. There’s probably not a phenomenon more symbolic of the year so far than people getting rich (or losing their shirts) from Dogecoin, a digital asset that started as a joke based on the popular “doge” meme with a Shiba Inu puppy, which skyrocketed in value this week.
Dogecoin soared after Reddit users promoted it on the heels of GameStop’s incredible rally; At one point, the virtual currency rose more than 600 percent and currently has a market capitalization of more than $ 6 billion. At the time of writing, one dogecoin is worth almost 5 cents, which is a dramatic jump from just a week ago when each coin was sold for about .008 cents. The coins reached 7 cents on the crest of the cryptocurrency on Thursday night.
The rise of the crypto-currency is the latest twist in the uprising in retail investments that caused shock waves in the country this week. Interestingly, the movement that fueled Dogecoin’s rise also created a new spirit of unity among right-wing and left-wing voters following the deep divisions that followed the November presidential election. Senator Ted Cruz, R-Texas, and Representative Alexandria Ocasio-Cortez, DN.Y. – usually fiery political enemies – both agree that it “unacceptableFor the Robinhood trading program to prevent retail investors from buying GameStop shares, after Reddit users played billions in hedge funds when they drove GameStop’s share price from about $ 20 to $ 347 on January 12.
After Robinhood effectively crashed the price of GameStop by preventing transactions, Redditors switched to Dogecoin. Users on the Reddit forum r / SatoshiStreetBets, named after the alleged inventor of Bitcoin, Satoshi Nakamoto, started inventing the cryptocurrency mid-week with the aim of sending its value “to the moon”.
Software engineers Billy Markus and Jackson Palmer invented Dogecoin in 2013, based on Bitcoin and the doge meme. Unlike bitcoin, there is no implemented limit for the total supply of dog coins. Initially, the cryptocurrency had an supply limit of 100 billion coins, but in 2014, Palmer announced that the limit would be removed. After the initial 100 billion coins were mined by mid-2015, another 5 billion coins are in circulation every following year. Ultimately, the increasing supply of dogecoin could make it a less popular asset for crypto investors in the long run.
Dogecoin can currently be bought on several wallets, including Binance and Robinhood, which came under even more scrutiny due to the restriction of crypto-trading later in the week. Just when the price of Dogecoin was rising, Robinhood users immediately started paying attention to buying cryptocurrencies, not working.
“Due to exceptional market conditions, our instant purchasing power for crypto has been temporarily shut down,” a trading platform spokesman told CNBC in a statement. ‘Customers can still use settled funds to buy crypto. We will continue to monitor market conditions and communicate with our customers. ”
Even despite the violent measures of Robinhood, Dogecoin continues to be strong. Its most dramatic rally came after Tesla CEO Elon Musk tweeted a fake magazine cover called “Dogue”, which was a clear reference to the currency.
– Elon Musk (@elonmusk) 28 January 2021
Musk’s tweet caused Dogecoin to become the most talked about cryptocurrency on Twitter ever. Followers of the Tesla CEO may have noticed that this is not the first time he has referred to Dogecoin. In December, he tweeted: “One word: Doge.” Musk, apparently a fan of cryptocurrencies, turned his Twitter biography into ‘#bitcoin’ on Friday morning, raising the cryptocurrency to $ 35,000.
Demand for cryptocurrencies has risen over the past few months as fears of inflation increase. A Democrat-controlled House, Senate and White House are likely to show no fiscal restraint and have indicated they are ready to impose drastic spending measures that could threaten the value of the dollar. President Joe Biden has already proposed a ‘$ 2 billion’ economic rescue package ‘that will include comprehensive blue state rescues, more unemployment benefits and big checks for all Americans. The account will presumably be financed by a combination of tax revenue, loans and money pressure.
Cryptocurrencies like Bitcoin, Ethereum and, yes, Dogecoin provide a hedge against inflation. But they are not without their own risks. Federal regulations can pose a huge threat to this asset class. Treasury Secretary Janet Yellen has already made statements indicating that Biden’s government is striving to regulate cryptocurrencies.
But for now, those concerned about loose monetary policies adopted by central banks, Redditors angry at hedge funds, and retail investors looking to get rich are all jumping into the crypto game in the hope that the value of their coins’ to the moon ‘.
Kristin Tate is a writer and columnist focusing on taxation and government spending. Her latest book, “The Liberal Invasion of Red State America,” will be published in 2020 by Regnery Publishing. She is a journalistic contributor to Robert Novak and an analyst for Young Americans for Liberty.