In this photo illustration, visual representations of digital cryptocurrencies, Bitcoin, Litecoin, Dogecoin, Ethereum and Ripple are arranged.
Yuriko Nakao | Getty Images News | Getty Images
GUANGZHOU, China – Dogecoin, a digital currency originally founded as a joke, has risen by more than 800% after a Reddit board talked about turning it into the cryptocurrency equivalent of GameStop.
The price of the dogecoin rose to $ 0.070755 around 12.01 pm Singapore, up more than 800% from 24 hours earlier, according to Coingecko. It was not far from the 24-hour high of $ 0.072330 earlier in the day.
Dogecoin was created in 2013 based on the popular “doge” meme of the time, which involved a Shiba Inu dog. The dogecoin logo is a Shiba Inu. It was originally started as a joke, but has since found a community.
While in recent years it has gained a decline in larger cryptocurrencies, such as bitcoin and ether, its reappearance in recent days has been driven by the enthusiasm of a Reddit group called SatoshiStreetBets. Like the WallStreetBets group behind the GameStop rally, SatoshiStreetBets is looking to pump up cryptocurrencies.
Satoshi is the name of the mysterious founder or group of people who developed bitcoin.
At 12.03 Singapore time, the dogecoin added about $ 7.17 billion to its market capitalization or total value in 24 hours, according to data from the Coinmarket ceiling. Its total market capacity amounted to $ 8.2 billion, becoming the ninth largest currency.
On Thursday, a poster claimed that Doge was the “gme crypt.” GME is the action marker for GameStop.
Another post suggested taking doges for $ 1 a coin. The cryptocurrency has never been at $ 1. In 2013, when it started, it was trading around 0.000232 USD.
As the price of dogecoin has risen, there have been some large price declines in recent hours. Reddit users on the forum encourage people not to sell and to “keep pushing.”
Elon Musk, the founder of Tesla, who previously wrote on Twitter about stocks and sent them up, wrote in the past about dogecoin and indicated in April 2019 that it is “fav’s cryptocurrency”.
On Thursday, he posted on Twitter an image of the cover of “Dogue” magazine – a play with the popular fashion title “Vogue”. Many Twitter and Reddit users felt that Musk was leaning behind the doge rally.
A Reddit user wrote, “Mr. Musk is with us … until the moon.”
However, the situation with dogecoin seems different from GameStop.
Reddit group WallStreetBets seems to be pushing the narrative of buying GameStop shares to create pain for hedge funds that shorten or bet on stocks. By buying GameStop shares, the so-called short pressure is created, which forces the funds to cover their losses. This pushes the stock higher.
Missing sellers borrow shares to sell them, to buy them back at a lower price in the future, so they can pocket the profit.
But there is no such dynamic of shortening hedge funds in the game with dogecoin. Instead, it seems that a group of people are just trying to push the cryptocurrency higher to make money. One of the first posts on SatoshiStreetBets read, “Let’s make DOGECOIN one thing. That’s it, this is the post. “
Such an activity is not new in the field of cryptocurrencies and has been going on for several years.
In 2018, the US Commodity Trading Commission (CFTC) sounded the alarm in pump-and-dump schemes. This is the time when a certain cryptocurrency is hyped online and then more and more people buy it. Those who were in the beginning sell when the price goes up, but many will buy close to the top and lose money.