Dogecoin, the soaring cryptocurrency created as a “joke”, is up a blistering 3,000% so far this year.
The dogecoin price, which started to soar in October last year when the latest bitcoin bull run kicked off, has added nearly 400% this week alone – screeching into the cryptocurrency top five with a market cap of around $ 50 billion.
Dogecoin mania has taken the world by storm this week, but some bullish investors are predicting that the dogecoin price hike could run even further and memecoin has managed to hold on to its massive gains so far.
Dogecoin, the ironic cryptocurrency created as a ‘joke’, has soared to an unprecedented explosion [+]
STRF / STAR MAX / IPx
The latest dogecoin frenzy, spurred by Telsa billionaire Elon Musk, has been largely driven by retailers hoping to get rich quick and has sparked warnings that those jumping on the dogecoin bandwagon could be burned. Uphold, a California-based cryptocurrency exchange, has reported that the number of users buying dogecoin has doubled in the past week.
“The rise of Dogecoin is a classic example of a larger foolish theory at play, dogecoin investors are basically betting that they can make money by selling to the next person who wants to invest,” said David Kimberley, an analyst at the British trading app Freetrade. , said in comments by email.
“People buy the cryptocurrency not because they think it has any meaningful value, but because they hope others will pile up, drive up the price and then they can make money quickly. But if everyone does this, the bubble must eventually burst and you will fall short if you don’t get it out in time. And it’s almost impossible to say when that will happen. “
Others have compared dogecoin to GameStop, the video game retailer that has seen its stock price skyrocket this year, while retailers organized through Reddit, Telegram, and Discord are piling up in an attempt to drive up the price.
“In the same way that the GameStop frenzy was portrayed as a Wall Street versus The Little Guy fighting game, dogecoin is pitched as a combat game against established crypto giants like bitcoin,” said Nigel Green, the chief executive. of deVere Group, said in email comments.
“We can expect many budding retail investors – who may not have the financial resilience needed – to be burned in the dogecoin frenzy the same way they did with the GameStop.”
The price of the dogecoin is up nearly 400% this week alone and is now hovering around 30 cents per [+]
Coinbase
While dogecoin is based on bitcoin’s decentralized blockchain technology, there is little developer activity and a handful of people own the vast majority of dogecoin tokens in circulation.
“It is very difficult to compare dogecoin with bitcoin, which runs on breakthrough technology and has a limited supply, which gives it valuable properties, among other things,” Green said.
Last month, data revealed that an anonymous person or group controls about 28% of all dogecoin tokens.
“It only takes one person to dump all of their assets to fuel the entire market,” added Kimberley.