A visual representation of dogecoin and other cryptocurrencies.
Yuriko Nakao | Getty Images
Dogecoin started out as a joke. Now it’s a top-10 digital currency worth $ 34 billion.
The crypto-currency is based on the “Doge” meme, which became popular in late 2013. The meme depicts a Shiba Inu dog along with nonsensical phrases in multicolored, Comic Sans text.
Dogecoin, created in 2013 by software engineers Billy Markus and Jackson Palmer, was intended to be used as a faster but ‘nicer’ alternative to bitcoin. It has since found a growing community online.
And now, despite all odds, dogecoin has a total market value of $ 34 billion, according to crypto-market data website CoinGecko, which added about $ 19.9 billion over the past 24 hours. The digital sign peaked at more than 28 cents on Friday morning, more than double the price of a day ago.
‘I just became a Dogecoin millionaire’
This is not the first time dogecoin has seen a wild climb. Like many cryptocurrencies, it is prone to volatile price fluctuations. Earlier this year, dogecoin started making a comeback due to enthusiasm from a Reddit group called SatoshiStreetBets.
Similar to the subreddit WallStreetBets, which helped spark a rally in GameStop shares at the start of 2021, SatoshiStreetBets wants to raise the prices of cryptocurrencies.
Dogecoin climbed again last week, hitting 10 cents a coin for the first time on Wednesday. It has risen by 300% in the last seven days.
On Friday, a Reddit user posted a photo of their dogecoin holdings in the Robinhood investment app.
“Hey guys, I just became a Dogecoin millionaire,” the user said, showing a balance of $ 1,081,441.29 in their account.
Why does dogecoin go together?
First, there is the Coinbase list. The most popular US virtual currency exchange was announced on Wednesday and recently reached a market capitalization of $ 100 billion at a key moment for cryptocurrencies.
The excitement surrounding Coinbase’s debut has led to an increase in bitcoin and ether prices. Bitcoin reached a record high of more than $ 64,000 on Thursday, while ether briefly hit $ 2,500 for the first time on Friday morning. Dogecoin was no exception to the fierce interest in these digital assets.
Dogecoin has attracted the attention of Robinhood users. The US online brokerage said on Thursday that there was a “major disruption” in its crypto-trading function after facing an “unprecedented demand”. The feature is now back online, Robinhood said.
Some reports attributed the latest dogecoin meeting to support for the memo-based sign from Tesla CEO Eles Musk. Musk made several tweets about dogecoin, which in turn helped raise the price.
Musk posted a cryptic tweet on Thursday in which he says: ‘Doge barking on the moon’, probably with reference to the popular crypto-snake phrase ‘to the moon’.
The billionaire called dogecoin his ‘fav’ crypto currency and ‘the people’s crypto’. Musk also emerged as a proponent of bitcoin, while its electric car business bought $ 1.5 billion from the cryptocurrency earlier this year.
But his tweets worried some investors, given their apparent ability to move markets. For example, some bitcoin investors have sounded the alarm about Musk’s dogecoin tweets. Nic Carter, co-founder of Castle Island Ventures, warned that retail investors would ‘lose money on dogecoin’, calling it a ‘vehicle for speculation’.
Bubble worries
The rising price of Dogecoin has led to concerns about a potential bubble in the cryptocurrency market. Some investors already regard bitcoin as a speculative bubble – the world’s most popular digital currency has more than doubled since the beginning of 2021.
“The rise of Dogecoin is a classic example of greater folly,” David Kimberley, an analyst at British investment app Freetrade, told CNBC.
“People buy the crypto-currency, not because they think it has significant value, but because they hope others will pile up, increase the price and then they can sell and make money fast.”
But, Kimberley added, “if everyone does, the bubble will eventually burst and you will be left short-changed if you do not get out in time. And it is almost impossible to say when it will happen.”
“This is doubly the case in crypto-markets where a small group of players often have a large part of the total number of ‘coins’ in circulation. large. “