By Anna Irrera, Tom Wilson and Gertrude Chavez-Dreyfuss
LONDON / NEW YORK (Reuters) – Dogecoin meme-based cryptocurrency fell on Tuesday after hitting a record high in a wild session in which supporters of the symbol once considered it a parody to use hashtags to fuel a rally until he lost steam.
Dogecoin eventually fell 15.4% to $ 0.33, but during the session, when it hit a record, its market capitalization rose to more than $ 50 billion. After the crisis, its market capitalization fell by about $ 45 billion, according to coinmarketcap.com.
By comparison, the extremely popular bitcoin has a market cap of over $ 1 trillion.
Dogecoin fans 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, marked by smoke and street parties.
„GIVE YOURSELVES WHICH DOGECOIN LAMBO !!! #DogeDay ”wrote on Twitter, referring to the Lamborghini sports car popular in crypto culture.
An 8,000% price increase this year has caused Dogecoin, launched as a satirical critique of the 2013 cryptocurrency frenzy, to surpass widely used cryptocurrencies, such as Litecoin and Tether in short, to become the most popular. the sixth largest coin.
“The current retail fervor is unlikely to completely give up Dogecoin,” said Edward Moya, a senior market analyst at online trading platform FX OANDA, but anticipated the “reaction to sell the event” for cryptocurrency.
The Dogecoin logo features a Shiba Inu dog in the center of the meme. It can be traded on cryptocurrency exchanges and on more popular traditional trading applications.
“The Doge Rally is an interesting convergence,” said Diana Biggs, CEO of crypto startup Valor, after the Dogecoin price rose more than fivefold in the past week to a record $ 0.42, according to CoinMarketCap.
“A meme coin created as a joke for the first encryption adopters whose community found this kind of fun, now having a new generation of retail investors for whom memes are a mother tongue,” Biggs added.
ONLINE TRADING
The increase in Dogecoin came during an increase in online stock and encryption transactions by retail investors, blocked at home with extra money due to the COVID-19 pandemic. The currency has not seen much increase in use for payments or trade.
A boom in the use of online trading applications, such as Robinhood, also fueled the social media rally in this year’s GameStop Corp shares, which put retail funds in front of retail investors.
“It is an extension of the same phenomenon that led to the capitalization of Tesla’s stock far beyond the fundamentals and, more recently, to the shortening of GME (GameStop),” said Ajit Tripathi, head of institutional business at decentralized finance startup Aave.
Like other cryptocurrencies, the price of Dogecoin is strongly influenced by social media users, including the head of Tesla, Elon Musk, whose cryptocurrency tweets in February sent the price by over 60%.
Dogecoin currently has a default probability of 16.7% to be worth more than $ 1 at the end of 2021, according to betting aggregators US-Bookies.com, a significant improvement over earlier this month, when it was only 2.9 % chances to do it.
(Reporting by Tom Wilson and Anna Irrera in London; Additional reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Alexander Smith and David Gregorio)