A visual representation of dogecoin and other cryptocurrencies.
Yuriko Nakao | Getty Images
Dogecoin started as a joke. Now it is a top 10 digital currency worth $ 34 billion.
The cryptocurrency is based on the “Doge” meme, which became popular in late 2013. The meme depicts a Shiba Inu dog alongside nonsensical phrases in multicolored text in 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 it has found a growing online community.
And now, against all odds, dogecoin has a total market value of $ 34 billion, according to crypto market data site CoinGecko, adding about $ 19.9 billion in the past 24 hours. The digital token hit a record high of more than 28 cents on Friday morning, more than doubling in price from a day ago.
‘I just became a Dogecoin millionaire’
It’s not the first time that dogecoin has seen a wild climb. Like many cryptocurrencies, it tends to fluctuate in price. Earlier this year, dogecoin began building a comeback, skyrocketing on the back of the enthusiasm of a Reddit group called SatoshiStreetBets.
Like the subreddit WallStreetBets, which fueled a rise in GameStop shares in early 2021, SatoshiStreetBets aims to drive up the prices of cryptocurrencies.
Dogecoin has rallied again in the past week, hitting 10 cents a coin for the first time on Wednesday. It’s up a whopping 300% in the past seven days.
On Friday, a Reddit user posted a photo of their dogecoin holdings on the Robinhood investment app.
“Hi guys, I just became a Dogecoin millionaire,” said the user, with a balance of $ 1,081,441.29 in their account.
Why is dogecoin rallying?
First, there is the Coinbase list. The most popular virtual currency exchange in the US went public on Wednesday, briefly reaching a market cap of $ 100 billion at a historic time for cryptocurrencies.
The excitement surrounding Coinbase’s debut sparked a surge in bitcoin and ether prices. Bitcoin hit a record high of over USD 64,000 on Thursday, while ether briefly topped USD 2,500 for the first time Friday morning. Dogecoin was no exception to the insane interest in these digital assets.
Dogecoin has gained a following among Robinhood users. On Thursday, the US online brokerage said there was a “major malfunction” in the crypto trading function after facing “unprecedented demand.” The feature is now back online, Robinhood said.
Some reports have attributed the latest dogecoin rally to support for Tesla CEO Elon Musk’s meme-based token. Musk has made several tweets about dogecoin, which in turn has helped drive the price up.
On Thursday, Musk posted a cryptic tweet that read “Doge Barking at the Moon,” likely in reference to the popular crypto slang phrase “to the moon.”
The billionaire has called dogecoin his ‘fav’ cryptocurrency and ‘the crypto of the people’. Musk has also emerged as a proponent of bitcoin, with his electric car company purchasing $ 1.5 billion worth of cryptocurrency earlier this year.
But his tweets worried some investors, given their apparent ability to move markets. For example, some bitcoin investors have raised the alarm about Musk’s dogecoin tweets. Nic Carter, co-founder of Castle Island Ventures, warned retail investors to “lose money on dogecoin”, calling it a “vehicle for speculation”.
Bubble worry
The skyrocketing price of Dogecoin has raised concerns about a potential bubble in the cryptocurrency market. Some investors are already seeing 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 bigger foolish theory at play,” David Kimberley, an analyst with British investment app Freetrade, told CNBC.
“People buy the cryptocurrency not because they think it has any meaningful value, but because they hope that others will pile up, drive up the price and then they can sell it and make a quick buck.”
But, Kimberley added, “when everyone else does this, the bubble must eventually burst and you will fall short if you don’t get out in time. And it’s nearly impossible to tell when that’s going to happen.”
“This is doubly the case in the crypto markets, where a small group of players often have a large proportion of the total number of ‘coins’ in circulation. That means it only takes one person to dump all of their assets to cover the entire market. to let grow. . “