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 coin originally created as a joke, is up more than 800% after a Reddit board talked about making it GameStop’s cryptocurrency equivalent.
The price of dogecoin was at $ 0.070755 around 12:01 a.m. Singapore, an increase of more than 800% from 24 hours earlier, Coingecko said. It wasn’t far from its 24-hour high of $ 0.072330 earlier in the day.
Dogecoin was created in 2013 from the then-popular “doge” memo involving a Shiba Inu dog. Dogecoin’s logo is a Shiba Inu. It initially started out as a joke, but has since found community.
While it has lagged behind larger cryptocurrencies such as bitcoin and ether in recent years, its resurgence in recent days is due to the enthusiasm of a Reddit group called SatoshiStreetBets. Like the group WallStreetBets, which was behind the GameStop rally, SatoshiStreetBets is trying to pump up cryptocurrencies.
Satoshi is the name of the mysterious founder or group of people who developed bitcoin.
At 12:03 a.m. Singapore time, dogecoin had added about $ 7.17 billion to its market cap, or total value, in 24 hours, according to Coinmarket cap data. Its total market cap was $ 8.2 billion, making it the ninth largest cryptocurrency.
On Thursday, a poster claimed Doge is the “crypto gme”. GME is the stock ticker for GameStop.
Another post suggested bringing Doge to $ 1 per coin. The cryptocurrency has never been at $ 1. In 2013 when it started it was trading around $ 0.000232.
While the price of dogecoin has skyrocketed, there have been some major declines in the price in recent hours. Reddit users on the board are encouraging people not to sell and to “keep pushing.”
Elon Musk, the Tesla founder who previously tweeted about stocks and made them rise, tweeted about dogecoin in the past, saying in April 2019 that it was his “favorite cryptocurrency.”
On Thursday, he tweeted a photo of a magazine cover of “Dogue” – a play about the popular fashion title “Vogue”. Many users on Twitter and Reddit take that Musk threw his support behind the doge rally.
One Reddit user wrote, “Mr. Musk is with us … to the moon.”
However, the situation with dogecoin seems different from GameStop.
The Reddit group WallStreetBets seems to be pushing the story of buying GameStop stock to create pain for hedge funds going short or betting against the stock. Buying GameStop stock creates what is called a short squeeze, forcing funds to cover their losses. This pushes the stock higher.
Short-sellers borrow shares to sell them, to buy them back at a lower price in the future, so they can store the profits.
But there is no such short-circuiting dynamics of hedge funds at play with dogecoin. Instead, it looks like a group of people are just trying to push the cryptocurrency higher to make money. One of the first messages on SatoshiStreetBets was: “Let’s make DOGECOIN something. That’s it, that’s the message.”
Such activity is not new in the cryptocurrency space and has been going on for several years.
In 2018, the US Commodity Futures Trading Commission (CFTC) sounded the alarm about “pump-and-dump” arrangements. This is when a particular cryptocurrency is hyped online and then more and more people are buying. Those who were in the beginning sell when the price gets high, but many will buy close to the top and lose money.