The 12th largest cryptocurrency, with a market value of $ 6.1 billion, is a joke.
Dogecoin (DOGE) started out as a joke in 2013 and is still a joke today – but its value has gone up 380% last month, 696% this year so far.
The currency caught the same wave of retail investors driven by Reddit as stocks like GameStop and AMC over the past two weeks, further accelerated by a handful of cheeky Elon Musk tweets pumping dogecoin.
On January 28, Dogecoin became the most tweeted cryptocurrency in a single day, beating a single day bitcoin record since January 2. Dogecoin was growing so dramatically last week that Robinhood turned off his instant purchase feature, which allows customers to get instant access to bank transfers, for bitcoin and dogecoin.
“Dogecoin is the cryptography of the people,” Musk tweeted late on Wednesday night. He added, “No ups, no downs, just Doge,” and shared a Lion King meme of himself as the Rafiki monkey holding a baby Simba with a Doge’s head.
Tesla’s CEO has tweeted about dogecoin several times since April 2019, when he tweeted: “Dogecoin could be my favorite cryptocurrency. It’s really cool. “And, as Musk has proven several times, his tweets can move the markets – which has caused him legal problems in the past.
In a live chat on the Clubhouse audio app on Sunday night, Musk warned: “Occasionally, I make jokes about dogecoin, but they are actually meant to be jokes.” That did not stop him from sending more tweets pumping the coin this week.
The “doge” meme dates from 2010, started by a Shiba Inu owner in Japan. The meme has evolved to show any Shiba Inu along with phrases, written in the affected English Comic Sans text.
Dogecoin was created in 2013 by programmers Jackson Palmer and Billy Markus as a fork of luckycoin (now extinct), which in turn was a fork of litecoin (LTC). (Cryptocurrency forks are tweaks to the underlying source code of a blockchain protocol to result in a divergent protocol or currency.) In 2014, dogecoin adapted merged-mining support with litecoin.
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Palmer abandoned dogecoin in 2015. He said several times that he intended dogecoin purely as a joke, made no money from its creation and sees a real danger in its increase: “I think it says a lot about the state of the cryptocurrency space in Generally speaking, a coin with a dog that hasn’t released a software update in over 2 years has a market value of $ 1B +, ”he said in 2018.
Three years later, the market capitalization of the currency is six times greater – with no practical function behind it and no limit on how many dogecoins can be extracted (there are 100 billion on offer and growing). Bitcoin is limited to 21 million.
Plus, you can buy and trade dogecoin relatively easily on dozens of crypto exchange sites, including Binance, Kraken, Huobi and Robinhood, and real people are making money from it. (Coinbase does not support purchasing dogecoin, but you can store dogecoin in the Coinbase Wallet app.)
Don’t scratch everything for Musk.
Viral and meme actions are going through a moment with cryptocurrencies amid the increase caused by the pandemic of the domestic retail investor.
Titans of the Wall Street hedge funds, which previously rejected bitcoin, now allocate a percentage of their portfolios to it. PayPal, Square, Visa and other consumer-facing domestic payment names have opened their arms to encryption. Old-school video game maker Atari released an encryption token. Apple co-founder Steve Wozniak released a cryptographic token. The market capitalization of all cryptocurrencies reached $ 1 trillion for the first time in January, and even a joke coin like dogecoin is a very real part of that.
[READ MORE: How bitcoin narratives have evolved to fuel current price surge]
So, should you buy dogecoin as an investment?
The advice shared at a Yahoo Finance crypto summit in 2018 by Nick Tomaino, a former Coinbase student who now runs the crypto company VC 1confirmation, still applies: “How I describe most of these currencies is that they are based on memes, ”he said. “Last year, there was so much interest and fervor in this space that if you create a currency and have a good meme, you could have a billion dollars in market value … Why is this a bad thing in the short term? Because many people are likely to lose a lot of money. Why is this a good thing in the long run? Because for every person who worries about getting rich quickly, there is also a person who becomes more deeply interested in technology. And it will help space in the long run. “
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Daniel Roberts is general editor of Yahoo Finance and has been covering bitcoin since 2011. Follow him on Twitter at @readDanwrite.
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