A visual representation of dogecoin and other cryptocurrencies.
Yuriko Nakao | fake images
Dogecoin started out as a joke. It is now one of the top 10 digital currencies with a value of $ 34 billion.
The cryptocurrency is based on the “Doge” meme, which became popular in late 2013. The meme portrays a Shiba Inu dog along with nonsensical phrases in multicolored text with Comic Sans font.
Created in 2013 by software engineers Billy Markus and Jackson Palmer, dogecoin was intended to be used as a faster but “fun” alternative to bitcoin. Since then, he has found a growing online community.
And now, defying all odds, dogecoin has a total market value of $ 34 billion, according to crypto market data site CoinGecko, adding around $ 19.9 billion in the last 24 hours. The digital token hit an all-time high above 28 cents on Friday morning, more than double its price from a day ago.
‘I just became a Dogecoin millionaire’
It is not the first time that dogecoin has experienced a wild escalation. Like many cryptocurrencies, it has a tendency to volatile changes in price. Earlier this year, dogecoin began to make a comeback, skyrocketing thanks to the enthusiasm of a Reddit group called SatoshiStreetBets.
Like the WallStreetBets subreddit, which helped fuel a rally in GameStop shares in early 2021, SatoshiStreetBets aims to drive up crypto prices.
Dogecoin has risen again in the past week, hitting 10 cents a coin for the first time on Wednesday. It has increased by a whopping 300% in the last seven days.
On Friday, a Reddit user posted a photo of his dogecoin holdings on the investment app Robinhood.
“Hey guys, I just became a Dogecoin millionaire,” said the user, showing a balance of $ 1,081,441.29 in his account.
Why is Dogecoin recovering?
On the one hand, there is the Coinbase listing. The most popular virtual currency exchange in the US went public on Wednesday, briefly reaching a market capitalization of $ 100 billion in a historic moment for cryptocurrencies.
The excitement surrounding Coinbase’s debut led to a spike in bitcoin and ether prices. Bitcoin hit a record high of over $ 64,000 on Thursday, while Ether briefly topped $ 2,500 for the first time on Friday morning. Dogecoin has not been an exception to the frenzy of interest in these digital assets.
Dogecoin has been met with frenzied interest from Robinhood users. On Thursday, the US online brokerage said there was a “major disruption” in its crypto trading function after facing “unprecedented demand.” The show is now back online, Robinhood said.
Some reports have attributed the latest dogecoin rally to support for the meme-based token from Tesla CEO Elon Musk. Musk has made several tweets about dogecoin, which in turn has helped drive up its price.
On Thursday, Musk posted a cryptic tweet that read “Doge barking at the moon,” probably referring to the popular crypto-slang phrase “to the moon.”
The billionaire has called dogecoin his “favorite” cryptocurrency and “the crypto of the people.” Musk has also come out as a supporter of bitcoin, with his electric car company buying the cryptocurrency worth $ 1.5 billion earlier this year.
But his tweets have worried some investors, given his apparent ability to move the markets. Some bitcoin investors, for example, have sounded the alarm over Musk’s Dogecoin tweets. Nic Carter, co-founder of Castle Island Ventures, warned that retail investors “are going to lose money on dogecoin,” calling it a “vehicle for speculation.”
Dogecoin’s skyrocketing price has raised concerns about a possible bubble in the cryptocurrency market. Some investors already see Bitcoin as a speculative bubble – the world’s most popular digital currency has more than doubled since early 2021.
“The rise of Dogecoin is a classic example of a sillier theory at stake,” David Kimberley, an analyst at UK investment app Freetrade, told CNBC.
“People are buying the cryptocurrency, not because they think it has significant value, but because they expect others to pile up, raise the price, and then they can sell and make a quick buck.”
But, Kimberley added, “When everyone is doing this, the bubble eventually has to burst and you will be left unchanged if you don’t get out on time. And it’s almost impossible to say when that will happen.” . “
“This is doubly the case in crypto markets, where a small group of players often have a large chunk of the total number of ‘coins’ in circulation. That means it only takes one person to ditch all of their holdings for that the whole market is stagnant. “