Topline
The Dogecoin cryptocurrency surged to an all-time on Friday morning – almost tripling its value in just 24 hours – while the RobinHood trading app, popular with Millennials, reported intermittent outages due to heavy crypto trading
UKRAINE - 2021/02/08: In this photo illustration a Dogecoin sign of a digital cryptocurrency is seen ... [+]
Key Facts
As of 11:10 a.m. Friday, the value of Dogecoin had jumped 203% in just the past 24 hours to an all-time high of $0.404, according to Coinbase, giving the cryptocurrency a market cap value of $52.2 billion.
Over the past week, Dogecoin’s value has more than quintupled in value.
According to CoinGecko.com. Dogecoin is now the seventh largest cryptocurrency in terms of market cap, but far behind number one Bitcoin, which now has a market cap in excess of $1.1 trillion.
Trading volume for cryptocurrencies were so frenzied on Monday that popular trading app RobinHood said at 10:19 a.m. that it was “experiencing issues with crypto trading due to unprecedented volumes.
On early Thursday morning, Elon Musk made a cryptic tweet apparently referring to his support of Dogecoin.
Key Background
The Dogecoin began as a “joke” in 2013 and is based on the “Doge” meme which depicts a cartoon version of a Shiba Inu, a breed of Japanese hunting dog. Dogecoin has witnessed price spikes earlier this year – its value soared 800% in just one day in late January due the efforts of members of a Reddit board called SatoshiStreetBets which piled into the cryptocurrency. Similar to the subreddit group WallStreetBets, which helped pumped up shares of GameStop in early 2021, SatoshiStreetBets seeks to bolster the prices of cryptocurrencies. Dogecoin’s surge in value also coincides with the landmark public listing on Wednesday of Coinbase, the virtual currency exchange which briefly reached $100 billion market cap. On Thursday morning, Dogecoin aficionado, Tesla chief Elon Musk tweeted an illustration of a dog staring up at the night sky, with the caption “Doge Barking at the Moon.”
Crucial Quote
“I was one of the many people that said Doge will not hit [$0.10] and I put my foot big time in my mouth. I am now no longer in the disbelief that a meme coin with such a huge community can not do amazing things and make people big profits,” wrote member of SatoshiStreetBets on Friday morning.
Tangent
Tesla boss Elon Musk has long championed Dogecoin, often tweeting his support of the cryptocurrency, prompting subsequent price gains. Earlier this year, Musk dubbed Dogecoin the “people’s crypto,” and “No highs, no lows, only Doge.” Musk is also a big advocate of Bitcoin. In early February, Tesla purchased $1.5 billion worth of bitcoin and said it will accept bitcoin as a form of payment.
Chief Critic
Nic Carter, a venture capitalist and co-founder of data firm Coin Metrics, who is bullish on bitcoin, told CNBC earlier this year: “Unfortunately a lot of retail [investors] are going to lose money on dogecoin in the long term because there’s really not much there in terms of interesting technology. The only thing it can really do is be zombified and stick around and be an empty shell for people’s expectations and for their entertainment.”
What To Watch For
Some analysts worry that Dogecoin is in a bubble that will eventually burst. “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,” David Kimberley, an analyst at British-based investing app Freetrade, told CNBC. “When everyone is doing this, the bubble eventually has to burst and you’re going to be left short-changed if you don’t get out in time. And it’s almost impossible to say when that’s going to happen.”
Further Reading
Dogecoin Is Soaring—Near 10 Cents For First Time (Forbes)
‘Doge Meme Shield’—Tesla Billionaire Elon Musk Is No Longer Boosting His ‘Fav’ Bitcoin Rival Dogecoin (Forbes)
‘Doge Is Underestimated’—Elon Musk’s ‘Fav’ Bitcoin Rival Dogecoin Is Getting A Surprise Upgrade (Forbes)
