But if you have serious intentions to invest in Dogecoin, take a closer look at this cryptocurrency. Don’t buy just because you saw someone else buy it, or because you’re a fan of the Shiba Inu.
What is Dogecoin?
DogeCoin abbreviated as DOGE is a digital virtual currency developed based on the LiteCoin coin. This coin appeared on the money market at the end of 2013 and immediately left many imprints. By the end of 2014, Dogecoin had more than 100 billion officially in circulation, opening a new era of digital currency revolution 4.0.
Doge is a photo of a Shiba Inu dog with nonsense phrases written in a colorful Comic Sans font. Meanwhile, this cryptocurrency was the product of software engineers Billy Markus and Jackson Palmer in 2013.
Before creating DOGE, Billy experimented with a digital coin he invented himself called Bell. During the testing process, he gained a lot of experience in the field of digital money. So after running the test he created the virtual coin Dogecoin.
The coin is intended to be used as a faster but more enjoyable alternative to Bitcoin. Since then, it has had an online community to grow.
This coin is based on Litecoin, has a very fast mining speed compared to other digital currencies, and is not limited to Bitcoin. As of February 2020, more than 123.3 billion Dogecoin have been created. The coin’s price has increased by 5,000% since its inception, with a total market cap of around $ 32 billion.
Along with the explosion of digital money, Dogecoin not only confirmed itself but also participated in the group of 10 largest digital currencies in the world with a market value of more than 40 billion USD. In the past 24 hours alone, this cryptocurrency has doubled in price. As of the morning of April 16, the value of a Dogecoin reached 32 cents, 2 times more than the previous day.
“I just became a Dogecoin millionaire”
This is not the first time the Dogecoin price has exploded. Like many other cryptocurrencies, it has a very strong tendency to fluctuate in price. In 2018, Dogecoin and many other popular digital currencies increased together, but no one noticed it except for a small group. Earlier this year, Dogecoin suddenly soared thanks to the enthusiastic push from a Reddit group called SatoshiStreetBets.
Similar to WallStreetBets, the group that generated the insane surge of GameStop shares in early 2021, SatoshiStreetBets focused on the appreciation of cryptocurrencies. Dogecoin is one of the names chosen. It hit 10 cents on April 7 for the first time last week before rising 400 percent in just seven days.
On April 16, a Reddit user posted a picture of his Dogecoin holding on the Robinhood investment app and commented: “Hey guys, I just became a Dogecoin millionaire.” This user also showed off a display balance of $ 1,081,441.29 in his account.
Decoding the big gain of Dogecoin
First of all, Coinbase is offering the US stock exchange. America’s most popular virtual currency exchange officially went public on April 14. It quickly reached a market cap of $ 100 billion during what was described as critically important for cryptocurrencies.
The excitement of Coinbase’s listing caused the price of Bitcoin and Ether to soar. Bitcoin hit a record $ 64,000 per coin on April 15 while Ether also quickly hit $ 2,500 for the first time on April 16. Dogecoin is no exception to the frenetic interest of investors with cryptocurrencies.
The digital currency has also attracted a large number of Robinhood app users. On April 15, the US online brokerage company said there was a “big problem” with its cryptocurrency trading feature when the demand of users was “unprecedented”. However, Robinhood has fixed the bug and the feature is back to normal.
Some reports suggest that Dogecoin’s increase is related to Tesla CEO Elon Musk. This well-known billionaire has made several posts on social media about this cryptocurrency and this has contributed to driving the price of the coin to soar.
On April 15, Musk posted a puzzling tweet “Doge Barking at the Moon.” As CNBC explained, this phrase is likely to be the popular cryptocurrency slang, implying they will “go to the moon.”
Musk has also called Dogecoin his favorite digital currency and everyone’s cryptocurrency. Recently, Musk has also been one of the ardent supporters of Bitcoin. In addition to pouring money into the digital currency, Musk also allows customers to buy Tesla cars with digital currency.
However, Musk’s message line worries many people because of its terrible impact on the market. For example, some Bitcoin investors have been ringing alarm bells about Musk’s messages with this cryptocurrency. They assume that retail investors will lose money by throwing at Dogecoin while calling it a “speculative vehicle.”
Concern about bubbles
Dogecoin’s dizzying increase continues to exacerbate concerns about potential bubbles in the crypto market. Some investors see Bitcoin as a speculative bubble, and it’s the same investment risk as Dogecoin. The world’s largest cryptocurrency by market capitalization has more than doubled since the start of 2021.
David Kimberley, an analyst with investment app Freetrade, said: “Dogecoin’s rise is a prime example of the public’s sentiment. People buy digital money not because they think it’s valuable, but only. because they hope others will buy, push the prices up later so they can sell off and make money quickly. ”
However, Kimberley also warns that when everyone invests in this trend, the bubble will eventually burst and most players will be empty-handed if they don’t get out. The worst part of the problem is that no one knows when the bubble will burst.
“With cryptocurrencies, there is usually a small group of players holding the majority of the coins in circulation. That means that only one of them sold off their assets, the entire market will melt. smoke, “Kimberley stressed.