Dogecoin, the cryptocurrency that was based on the “Doge” meme, which rose to popularity in late 2013, is now among the top 10 digital currencies of the world and is worth $40 billion. The meme portrays a Shiba Inu dog alongside nonsensical phrases in multicolored, Comic Sans-font text.
The aim of creating dogecoin in 2013 by software engineers Billy Markus and Jackson Palmer was to enable its use as a faster but “fun” alternative for bitcoin but has since become popular among an expanding online community.
And against all odds and expectations of analysts, this digital coin now has a total market value of more than $40 billion. In its latest surge, this cryptocurrency added more than $20 billion in its value within 24 hours according to crypto market data site CoinGecko. As on Friday morning, the digital token reached an all-time high of 32 cents which was more than double its price the previous day.
This is however not the first time that such a huge jump has been seen in the digital currency. It has a tendency to have high volatility in its price just like most other cryptocurrencies. The price of dogecoin had started to rise with all other popular digital currencies in 2018 and has since been off the radar most of the time. But the value of the digital curre3ncy skyrocketed earlier this year because of the enthusiasm in the cryptocurrency shown by a Reddit group called SatoshiStreetBets.
The aim of SatoshiStreetBets’ activities is to shore up the prices of cryptocurrencies just like that of another group on Reddit called subreddit WallStreetBets which was instrumental in causing a rally in GameStop shares at the start of 2021.
And over the past week, the price of dogecoin has been climbing again. This Wednesday, its price hitting 10 cents a coin and has risen by as much as 400 per cent in just the last week.
A picture of their dogecoin holdings on the Robinhood investing app was posted by a Reddit user on Friday. “Hey guys I just became a Dogecoin millionaire,” the user said, showing a balance of $1,081,441.29 in their account.
There is a following among users of Robinhood for dogecoin. After facing “unprecedented demand”, the United States based online brokerage said on Thursday there was a “major outage” in its crypto trading feature. Robinhood said that the feature is now back online.
However there are analysts and experts who are concerned about a potential bubble in the cryptocurrency market because of the skyrocketing price of dogecoin. Bitcoin, the most popular digital coin of the world, is already considered as a speculative bubble by some investors and analysts. Its price has more than doubled since the beginning of 2021.
“Dogecoin’s rise is a classic example of greater fool theory at play,” David Kimberley, an analyst at U.K. investing app Freetrade, said in a television interview.
“People are buying the cryptocurrency, not because they think it has any meaningful value, but because they hope others will pile in, push the price up, and then they can sell off and make a quick buck.”
But, Kimberley added, “when everyone is doing this, the bubble eventually has to burst and you’re going to be left shortchanged if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.”
(Adapted from CNN.com)