Dogecoin prices hit an all-time high on Tuesday, with a market cap of more than $ 50 billion, after social media fans used hashtags to spark a rally in the meme-based cryptocurrency.
A price increase of 8,000% this year has seen Dogecoin, which was launched as a satirical critique of the cryptocurrency frenzy of 2013, overtook more widely used cryptocurrencies such as Tether to become the fifth largest coin.
While Dogecoin, whose logo features a Shiba Inu dog at the center of the meme, represents a mere fraction of bitcoin’s $ 1 trillion worth, it can be traded on crypto exchanges and more popular mainstream trading apps.
“The Doge rally represents an interesting convergence,” said Diana Biggs, CEO of crypto start-up Valor, after Dogecoin’s price more than quintupled to a record $ 0.42 in the past week, CoinMarketCap said.
“A meme coin created as a joke for early crypto adopters whose community liked that sort of thing, with now a new generation of retail investors for whom memes are native languages,” added Biggs.
Dogecoin fans used the hashtags #DogeDay and # DogeDay420 to post memes, posts, and videos on Twitter, Reddit and TikTok, referring to the casual April 20th holiday to celebrate cannabis, which is marked by smoke-ins and street parties.
“GIMME THAT DOGECOIN LAMBO !!! #DogeDay” tweeted one, referring to the Lamborghini car popular in crypto culture.
ONLINE EXCHANGES
Dogecoin’s rise is amid a surge in online stock and cryptocurrency trading by private investors who are left at home with extra cash due to the COVID-19 pandemic. It did not coincide with a growth in the use of the currency for payments or in commerce.
The same trend has fueled the use of online trading apps like Robinhood, as well as fueled the social media-driven rally in GameStop Corp (GME.N) stocks that pitted retail investors against hedge funds earlier this year.
“It is an extension of the same phenomenon that has led Tesla shares to be valued far beyond fundamentals and more recently to the GME (GameStop) short squeeze,” said Ajit Tripathi, head of institutional affairs at the decentralized financial startup Aave .
Like other cryptocurrencies, Dogecoin’s price is heavily influenced by social media users, including Tesla (TSLA.O) chief Elon Musk, whose tweets about the cryptocurrency boosted its price by more than 60% in February.
“If this goes as planned and everyone, including Mr. Musk, go ahead and just deposit money into Doge on April 20, then suddenly Doge will hit prices that weren’t even conceptual originally,” said a TikTok user in a video describing the coin.
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