DOGECOIN: Crypto Coin To Trade?
Starting out as a caricature a few years ago, this cryptocurrency has been on a rampant run this year thanks to individual investors who have rallied around it.
Now, it is safe to say, that dogecoin is no longer a joke! Its popularity has grown tremendously this year, especially with the somewhat general acceptance of Bitcoin and alternative cryptocurrencies.
This year alone, dogecoin hit more than %6,000 when it peaked, thus making it the N0. 5 most valuable cryptocurrency on the market according to CoinMarketCap, reaching a market capitalization of $85,314,347523 on May 5, 2021.
So, what is dogecoin? What is so special about this `joke currency’ that got people so keen on it?
BRIEF OVERVIEW
Pronounced as “dohj coin” according to the cryptocurrency’s co-founder, Billy Markus. Dogecoin happens to be a cryptocurrency that started as a joke less than a decade ago, precisely launched on December 6, 2013. Practically meant to serve no true purpose but basically ‘just for laughs’…a satirical approach towards Bitcoin.
Named after an internet meme, set around the image of a Shiba Inu dog (which interestingly has seen a spike in demand for these dog species lately) with bad spelling habits… hence “doge” rather than “dog”.
WHO INVENTED DOGECOIN
Dogecoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. They wanted to create a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. In addition, they wanted to distance it from the controversial history of other coins. Basically, these two software engineers just wanted something different, something not masked in mystery with an anonymous creator like Bitcoin which at the time attracted just a small niche group of miners.
Even Billy Markus himself didn’t anticipate his joke coin would make such a giant stride hence the selling of all his dogecoin in 2015 and purchasing a used Honda Civic with the returns.
HOW DID WE GET HERE?
According to Wikipedia, on December 19, 2013, dogecoin jumped nearly 300 percent in value in 72 hours, rising from USD 0.00026 to 0.00095 with a volume of billions of dogecoins per day. In fact, within the first 30 days after its official launch on December 6, 2013, there were over a million visitors to dogecoin.com.
This growth occurred during a time when Bitcoin and many other cryptocurrencies were tottering from China’s decision to forbid Chinese banks from investing in the Bitcoin economy.
Even after suffering a huge setback following a major theft of dogecoin on December 25, 2013, where millions of coins were stolen during a hack on the online cryptocurrency wallet platform doge-wallet, it still managed to claw its way back to reckoning in no time, as in January 2014, the trading volume of dogecoin briefly surpassed that of bitcoin and all other cryptocurrencies combined.
This wasn’t a mean feat at the time.
Then came the cryptocurrency bubble in 2017 to early 2018 which saw dogecoin briefly reach a peak of $0.017 pegging its market capitalization near $ USD 2 billion.
Fast forward to January 2021, dogecoin went up over %800 in just 24 hours, reaching a price of 0.07 as a result of attention from Reddit users, and also partially encouraged by Elon Musk.
These little factors were instrumental in catapulting dogecoin to a new high on April 16, hitting 0.45 (up %400) with a volume of nearly $70 billion traded in 24 hours.
At the time, dogecoin's market capitalization approached $ 50 billion, making it the fifth-valued cryptocurrency.
And just not too long ago on May 9, 2021, SpaceX announced a rideshare mission to the moon totally funded by dogecoin, thus making it the first space mission funded by a cryptocurrency.
Although cryptos are gaining more acceptance as a currency for purchasing goods, dogecoin doesn’t have customary real-world use. It has just a few niche markets.
Unlike bitcoin, which has designated 21 million as the limited amount of digital currency, dogecoin has 129 billion coins in circulation and will continue to make new blocks of coins available to mine each year, hence one of the reasons one dogecoin is valued at about three dimes and a single bitcoin is currently worth over $33,000, and over $60,000 at its peak.
This therefore begs the question:
WHY IS DOGECOIN SO POPULAR?
Dogecoin all of a sudden is no more a joke. Why?
Well, some people think that this is yet another sign of the market madness that has also seen surges in stocks touted on online forums.
But, with dogecoin, its main differentiator from other cryptos is its active online community. This is what makes this currency such an item.
Despite nearly a decade passing since its creation, dogecoin has remained beloved by this small community that has really taken a liking to the image of the dog’s fury face and has Photoshopped it onto almost everything.
This group which is active on Reddit, had at one point raided money for charitable causes, and also in 2014 successfully crowdfunded a sponsorship to get Nascar driver Josh Wise to advertise dogecoin on his car. This said the community is really growing rapidly.
But we can’t really talk about dogecoin without mentioning the Elon Musk factor!
Musk can be said to be the loudest and most prominent supporter of dogecoin. One of his bizarre tweets to his 50 million followers can send the crypto surging, as was witnessed in April when Musk tweeted “Doge barking at the moon” with an accompanying photo.
His cryptic comments have significantly prompted the cryptocurrency’s popularity to skyrocket.
Dogecoin has also enjoyed something of a cult status on Reddit where of course its ever-loyal followers decided earlier this year to propel its value “to the moon”. Dogecoin soared over %600 in the wake of that push.
These Dogecoin fans are really rooting for it to hit $ 1.
Conclusively, suffice it to say that cryptocurrency trading has become a big business, and is very popular amongst new entrants into the trading space, also for major institutional traders and hedge fund managers.
The opportunity presented in cryptocurrency trading is something new and is difficult to match in the regular arena. This makes it something thrilling for traders but also leaves some nervousness and a feeling of doubt.
It is therefore pertinent to state clearly that cryptocurrencies are highly volatile and prone to large swings in either direction. Bitcoin for instance skyrocketed this year and by April 16 was trading above $61,000, compared to less than $30,000 it was at the end of last year. Yet it has since seen some major pullbacks…even most recently where it dipped less than $24,000. And as of July 2, it was trading at $33,000.
Simply put, if the more actively traded and more widely accepted bitcoin is subject to extreme volatility, dogecoin too crumbles without warning. Sounding a note of caution, Garrick Hileman, head of research at blockchain.com, opines that dogecoin could easily lose %90 of its value. “I do worry about all the attention paid to a cryptocurrency that historically has not seen real-world transaction and is a bit of a joke – literally”, he remarked.
But, whether or not dogecoin is a smart investment remains a valid question. However, one thing is certain, its rise this year has been nothing short of STUNNING.
Presently, the total value of dogecoins in circulation is nearly $50 billion – not bad for a digital currency that started out as a joke.
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