If you’re even paying remote attention to the crypto market this year, you would have understood Dogecoin and its premise. The hype surrounding the asset has been insane, with the meme-themed cryptocurrency delivering over 1,000 percent in returns this year alone. Many enthusiasts have become devoted to SpaceX chief executive Elon Musk and other influencers, and the price has so far rewarded them rather well.
So, let’s look into Dogecoin and why it has become so popular in recent times.
What Actually is Dogecoin?
Ask any crypto enthusiast about what Dogecoin is, and they’ll probably tell you the same thing - it is a cryptocurrency that was created as a meme and whose value has since skyrocketed. In truth, this is pretty accurate.
Dogecoin was created in 2013 by Jackson Palmer and Billy Markus - two software engineers. The asset was meant to be a quicker and more fun alternative to Bitcoin, with shorter transaction confirmation times and a generally happy-go-lucky feeling to it.
When Dogecoin started, it was essentially a satire that represented the many fraudulent digital assets existing at the time. Around 2013, cryptocurrencies first broke into the limelight, and people began understanding what they were. Like every top trend, some criminals and fraudsters found a way to capitalize off this popularity and benefit from the Fear of Missing Out (“FOMO”).
Dogecoin essentially was created to poke fun at this. The developers didn’t quite have a plan for the asset they created, beyond just to serve as a meme and make fun of cryptocurrencies in general. To make things worse, Palmer and Markus even took the logo and name of the asset from the famous Shiba Inu meme that gained notoriety a few years back.
Despite the joke innuendo, Dogecoin has some fundamentals. For instance, unlike Bitcoin that had a maximum cap of 21 million, there was no limit to the number of Dogecoin tokens that can be minted. Currently, there is over 100 billion $DOGE out there.
When Dogecoin eventually got out, it raised some eyebrows. Many understood that it was simply a joke of an asset, although the team behind it soon became famous when they sponsored the Jamaican bobsled team at the 2014 Winter Olympics. That same year, the developers gave $55,000 worth of $DOGE to a NASCAR driver in the United States. Considering that the asset was worth next to nothing at the time, you can imagine how much it would be worth now!
The Hype for 2021
For years, Dogecoin remained what it was - a joke of an asset that didn’t give much in terms of value to anyone. Everyone understood that it was a meme, and it pretty much stayed in its lane.
However, 2021 has been a completely different story. Dogecoin has been on a tear, with investor sentiment continually being positive and more people trying to understand what the asset actually is.
The first surge came in January, following the infamous GameStop saga. A couple of Reddit investors banded together to perform a short squeeze after Melvin Capital - a New York hedge fund - planned to short GameStop stock. After the saga died down, it seemed like these investors turned their attention to Dogecoin. The asset’s price rose by over 200 percent in a week, netting massive gains for investors.
Fast-forward to April, and the gravy train has continued to move forward. Elon Musk, the head of SpaceX, has continued to trumpet Dogecoin on his Twitter account, fueling FOMO from investors with each tweet. Dogecoin has also benefited from the same hype that pushed top cryptos like Bitcoin and Ether, thanks to Coinbase listing on the NASDAQ and other developments.
Today, Dogecoin is worth $0.42 and is ranked as the fifth-largest cryptocurrency with a market capitalization of $54.4 billion, per CoinMarketCap data.
April 20 was the infamous #DogeDay, and while the asset’s price didn’t rise spectacularly on the day, the price did surge in the lead up to the celebrations. In early May, Elon Musk also confirmed that he would be making an appearance on Saturday Night Live. The announcement immediately sent speculation that Musk was looking to reference Dogecoin, sending many to purchase the asset in anticipation.
Musk’s SNL appearance did include a lot of Dogecoin references, but it still wasn’t enough to send $DOGE higher. Still, the work had been done. The excitement in the lead-up to the appearance was enough to send the asset to an all-time high of $0.75.
Some Cause for Concern
Despite the rise of Dogecoin, many have pointed out that this phenomenon is a tad scary. One of the asset’s creators has told Bloomberg that the asset’s rise has baffled him. An article from Payments Magazine also cautioned that this Dogecoin rise could be a cause for concern.
“And maybe the hype is just hype, feeding off itself in a chamber that is echoing rather loudly at the moment. Many proponents across social media (Elon Musk and Mark Cuban among them) have been touting the coin, cheerleading for it to touch $1. That would be a psychological barrier of sorts, which would prove some sort of point to the rest of the world, maybe just that it can get there.”
Cause for concern or not, there is no doubt that the Dogecoin rise is here. No one will force a purchase, but there is much to see here.