On May 5, Dogecoin price increased sharply, at one point approached the $ 0.7 mark/dong, market cap reached $ 87 billion. Dogecoin‘s price has risen 118% in the past week, according to CoinMarketCap.
This is also the highest value of the Shiba dog logo since its inception. Compared to a year ago, Dogecoin’s market cap was only about $ 315 million.
According to Bloomberg, Dogecoin has been caught up in the world’s crypto craze, described by American economist Nouriel Roubini as “Self-Fulfilling Bubble.”
In the past, investors tended to rush to buy gold and risky stocks with speculative psychology of inflation prevention after stimulus worth trillions of dollars by the government and central banks. However, at the moment, the fledgling cryptocurrency exchange market is the place to receive a large amount of investment cash flow.
The Shiba dog coin is a favorite pouring category of investors who trade thanks to Internet rumors or spontaneous buying fever. Elon Musk, the boss of Tesla, is a symbolic example of the factors that influence the price of cryptocurrencies. This weekend, many investors predicted Musk would mention Dogecoin while attending the Saturday Night Live comedy show. After each related statement, Musk often makes the crypto market volatile.
“When you think about the whole spirit of what this crypto revolution is, there’s something pure in what dogecoin has done. I worry that once the enthusiasm rolls out, there are no developers. There’s no institution coming in, but it’s got the moniker of ‘the people’s coin’ right now,” Mike Novogratz, founder of Galaxy Digital Holdings, told CNBC.
Cryptocurrencies are hurting portfolios of stocks, hedge funds, or gold. According to Bloomberg, gold investment cash flows quickly lost after a large amount of cash pushed the value of the crypto market to a record $ 2,000 billion.
“At some point, something is just real. If Dogecoin is stupid and valueless, it shouldn’t be worth US$90 billion. How about gold or Bitcoin or euros? Our collective imagination has given them value, and now we just think about them having value,” said Sam Bankman-Fried, CEO of Hong Kong-based crypto exchange FTX.
At Blockfolio, an FTX-owned company that helps users manage their crypto portfolios, Dogecoin’s trading volume has seen a spike. Dogecoin buying has turned into a fever since May 4, even causing a problem with Robinhood’s cryptocurrency trading application. Besides, the prices of other altcoins also recorded positive growth.
According to Bloomberg, it is difficult to determine the cause of the Shiba coin trading fever. Earlier, on April 20, some investors blew Dogecoin’s price through the hashtag #DogeDay. In addition, the moves of famous billionaires in the industry such as Mark Cuban, Elon Musk are also the reason why the market fluctuates. On May 4, the Winklevoss twins Gemini announced that it will soon allow trading of Dogecoin.
“As the economy reopens, a lot of these COVID-related movements in various assets will experience some volatility. But I think they are going to become a permanent part of the currency markets as central banks have continued to print money at astronomical levels,” commented Tony Bedikian, a leader at Citizens Bank.
Why did Dogecoin suddenly skyrocket?
Dogecoin’s value soared, according to many crypto experts, as many traders did not want to miss out on any rumors stemming from Elon Musk’s participation in Saturday Night Live.
In January 2021, crypto traders around the world imagined the prospect of DogeCoin reaching the 10-cent ($ 0.01 / Dogecoin) price mark. However, things have changed dramatically in just a few months.
Accordingly, at 13:00 on May 5, DogeCoin hit $ 0.69 / 1 Dogecoin – the highest price ever of a cryptocurrency that was born to be ‘meme’. Currently, Dogecoin’s price is trading at the $ 0.66 mark.
Dogecoin’s price jump is by no means accidental. It started with a tweet by billionaire Elon Musk. As one of Dogecoin’s most ardent supporters, tweets from the Tesla CEO tend to cause the crypto currency’s price to skyrocket.
Accordingly, the price of the cryptocurrency suddenly skyrocketed at a time a week ago, when Elon Musk tweeted about The Dogefather (Elon Musk’s pun, Doge and Godfather work). and his upcoming performance on the hit shows Saturday Night Live on May 8.
According to many crypto experts, Dogecoin’s value soared as many traders did not want to miss out on any rumors stemming from Elon Musk’s participation in Saturday Night Live – which was supposed to help ‘ Dogecoin’s ‘reputation’ is more widely accessible to the public. Additionally, the fact that trading platforms like eToro and Gemini allow Dogecoin trading on the exchange has significantly expanded the reach of the cryptocurrency.
For example, eToro alone, with 20 million users, can easily buy DogeCoin. Notably, the spike in DogeCoin trading appears to have caused problems for the Robinhood investment app. The app claims to be having problems with cryptocurrency transactions, possibly due to rising user demand.
As of now, Dogecoin is the 5th largest cryptocurrency by market cap, after Bitcoin, ETH, and BNB. Notably, the market capitalization of Dogecoin (about $ 86 billion according to data from Coinmarketcap) is more than double the capitalization of American automaker Ford Motor Company ($ 45.2 billion) and the guy.
Twitter giant (44.1 billion USD). That figure is even higher than the market capitalization of Honda Motor, which only reached $ 54.5 billion, according to data compiled by Bloomberg.
However, crypto experts recommend Dogecoin has many drawbacks compared to other cryptocurrencies, including its technology and potential. Therefore, crypto investors need to be cautious before deciding to buy this coin.