Dogecoin prices hit all-time highs on Tuesday, with a market capitalization of more than $ 50 billion, after social media fans used hashtags to fuel a rally in cryptocurrency based on memes.
An 8,000% price increase this year brought Dogecoin, which was launched as a satirical critique of the 2013 cryptocurrency frenzy, surpassing the most widely used cryptocurrencies, such as Tether, to become the fifth largest. bigger coin.
While Dogecoin, whose logo features a Shiba Inu dog in the center of the meme, is only a fraction of the $ 1 trillion worth of bitcoin, it can be traded on cryptocurrency exchanges and 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.
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 ”he wrote on Twitter, referring to the Lamborghini car popular in crypto culture.
ONLINE TRADING
The increase in Dogecoin came amid an increase in online stock and encryption transactions by retail investors, locked home with extra money due to the COVID-19 pandemic. It did not coincide with an increase in the use of currency for payments or in trade.
The same trend has spurred an increase in the use of online trading applications such as Robinhood, and has also fueled the social media-driven rally in the shares of GameStop Corp (GME.N), which has put retail funds in front of investors. earlier this year.
“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 (TSLA.O), Elon Musk, whose tweets on cryptocurrency sent their price by over 60% in February.
“If this goes as planned and everyone, including Mr Musk, continues and pours money into Doge on April 20, suddenly Doge will reach prices that were not even conceptual at first,” a TikTok user said in a video which promotes the currency.
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