- This week, DOGE saw a more than 500% price rise, from $0.065 on Monday to almost $0.4 on Friday.
- Tesla CEO Elon Musk once switched his Twitter bio to “Former CEO of Dogecoin.”
- Market enthusiasts fear that Dogecoin’s rise might lead to a bubble formation.
The famous “Doge” meme-inspired cryptocurrency has been exhibiting a phenomenal rise. Launched as an altcoin, the Dogecoin featuring the Shiba Inu dog from the “Doge” meme as its logo and namesake has been attracting lots of public interest.
Market Rise and Rank
This week, Dogecoin price rose from barely $0.065 to almost $0.4 on Friday, bringing it in the league as one of the top-10 cryptocurrencies with a total market value of over $40 billion, representing an addition of over $20 billion in the last 24 hours. Its current market ranking is 8.
Dogecoin was a “Joke”
Software engineers Billy Markus and Jackson Palmer, in 2013, created the crypto token as a faster and “fun” alternative to Bitcoin, in a way mocking the then-emerging numerous fraudulent crypto tokens. Unlike Bitcoins with a fixed tally of 21 million tokens, Dogecoin doesn’t have a limiting fixed number of tokens. In fact, there already are more than 100 billion DOGE tokens in existence.
Factors Powering Dogecoin Surge
Similar to the rise of Bitcoin and Ethereum, $64,000 and $2,500 respectively, the Dogecoin price surge was also powered by the same factor, i.e. inclusion in this week’s Coinbase listing. Witnessed Wednesday, Coinbase’s market cap hit $100 billion, hauling with it the prices of Bitcoin, Ethereum and Dogecoin.
Additionally, Tesla CEO Elon Musk, with his tweets, has been a huge supporter of “Doge.” The “Technoking” even once switched his Twitter bio to “Former CEO of Dogecoin.” In his footsteps, celebrities including rapper Snoop Dogg and rock musician Gene Simmons too promoted it on social media.
Another major driving force behind Dogecoin’s success is SatoshiStreetBets, a Reddit group whose members aim to pump up the prices of cryptocurrencies, just like how the subreddit WallStreetBets helped fuel a rally in GameStop shares at the start of 2021. The group is named after Satoshi Nakamoto, the presumed pseudonymous individual or group who invented Bitcoin.
Rise induced Doubts and Fears
However, the price rise has also devised its fair share of doubts. Market enthusiasts fear that Dogecoin price rise might lead to a bubble. The existing batch of buyers don’t associate any meaningful value with the digital coins, only trading to benefit from the rising rates. Consequently, an asset with no intrinsic value, unlike land or gold, is doomed to crash as fast as it rose. Such assets are considered highly volatile and are vulnerable to group manipulations, where a small group of people hold huge numbers of tokens and circulate them in the market at their will, affecting its price.
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