A visual representation of dogecoin and other cryptocurrencies.
Yuriko Nakao | Getty Images
Dogecoin started out as a joke. It is now a top 10 digital currency worth $ 34 billion.
The cryptocurrency is based on the “Doge” meme, which grew in popularity at the end of 2013. The meme depicts a Shiba Inu dog with meaningless phrases in multicolored text, without comic characters.
Created in 2013 by software engineers Billy Markus and Jackson Palmer, the dogecoin was intended to be used as a faster, but “fun” alternative to bitcoin. He has since found a growing online community.
And now, defying all odds, dogecoin has a total market value of $ 34 billion, according to cryptographic market data site CoinGecko, adding about $ 19.9 billion in the last 24 hours. The digital token reached a record high of 28 cents on Friday morning, more than doubling the price a day ago.
“I just became a Dogecoin millionaire”
This is not the first time the dogecoin has seen a wild climb. Like many cryptocurrencies, it has a tendency to volatile price fluctuations. Earlier this year, dogecoin began to return, growing full of enthusiasm from a Reddit group called SatoshiStreetBets.
Similar to the subreddit of WallStreetBets, which helped fuel a rally in GameStop stocks in early 2021, SatoshiStreetBets aims to raise cryptocurrency prices.
Dogecoin has risen again in the last week, hitting 10 cents a coin for the first time on Wednesday. It has increased by 300% in the last seven days.
On Friday, a Reddit user posted a picture of his dogecoin holdings in the Robinhood investment app.
“Hey guys, I just became a Dogecoin millionaire,” the user said, pointing to a balance of $ 1,081,441.29 in their account.
Why does dogecoin gather?
First, there is the Coinbase list. The most popular virtual currency exchange in the US went public on Wednesday, briefly reaching a $ 100 billion market cap at a benchmark for cryptocurrencies.
The excitement surrounding Coinbase’s debut has led to rising bitcoin and ether prices. Bitcoin hit a record $ 64,000 on Thursday, while the ether briefly surpassed $ 2,500 for the first time on Friday morning. Dogecoin was no exception to the frantic interest in these digital assets.
Dogecoin has attracted a number of users among Robinhood users. On Thursday, US online brokerage said there was a “major disruption” in its cryptocurrency trading function after facing “an unprecedented demand”. The function is now online again, Robinhood said.
Some reports have attributed the latest dogecoin rally to support for the meme-based symbol from Tesla CEO Elon Musk. Musk tweeted more about dogecoin, which in turn helped raise the price.
On Thursday, Musk posted an encrypted tweet that said “Doge barking at the moon,” probably in reference to the popular crypto-slang phrase “to the moon.”
The billionaire called dogecoin his cryptocurrency “fav” and “people’s crypt”. Musk also came out as a supporter of bitcoin, with his electric car company buying $ 1.5 billion worth of cryptocurrency earlier this year.
But his tweets worried some investors, given their apparent ability to move markets. Some bitcoin investors, for example, have sounded the alarm about Musk’s tweets. Nic Carter, co-founder of Castle Island Ventures, warned that retail investors “will lose money from dogecoin”, calling it “a vehicle for speculation”.
Bubble concerns
The rising price of Dogecoin has raised concerns about a potential bubble in the cryptocurrency market. Some investors already see bitcoin as a speculative bubble – the world’s most popular digital currency has doubled since early 2021.
“Raising Dogecoin is a classic example of a bigger theory of fools,” David Kimberley, an analyst at UK investment app Freetrade, told CNBC.
“People are buying cryptocurrency, not because they think it has any significant value, but because they hope that others will pile up, raise the price, and be able to sell and earn quickly.”
But, Kimberley added, “when everyone does this, the balloon has to explode eventually and you’ll be left changed if you don’t come out on time. And it’s almost impossible to tell when that will happen.”
“This is the double case in the crypto markets, where a small group of players often holds a huge amount of the total number of ‘coins’ in circulation. This means that it takes one person to throw all his holdings for the whole market to make his tank. “