In this photo illustration, visual representations of digital cryptocurrencies, Bitcoin, Litecoin, Dogecoin, Ethereum and Ripple are organized.
Yuriko Nakao | Getty Images News | Getty Images
GUANGZHOU, China – Dogecoin, a digital currency originally founded as a joke, soared more than 800% after a Reddit sign talked about making it the GameStop cryptocurrency equivalent.
The price of dogecoin was $ 0.070755 around 12:01 pm in Singapore, an increase of more than 800% from 24 hours earlier, according to Coingecko. It was not far from its $ 0.072330 24-hour high earlier in the day.
Dogecoin was created in 2013 based on the popular meme “doge” at the time, which involved a Shiba Inu dog. The dogecoin logo is a Shiba Inu. It was initially a joke, but has since founded a community.
Although it has been left behind in relation to larger cryptocurrencies like bitcoin and ether in recent years, its resurgence in recent days was due to the enthusiasm of a Reddit group called SatoshiStreetBets. Like the WallStreetBets group, which was behind the GameStop rally, SatoshiStreetBets is looking to increase cryptocurrencies.
Satoshi is the name of the mysterious founder, or group of people, who developed bitcoin.
At 12:03 pm Singapore time, dogecoin had added about $ 7.17 billion to its market capitalization or total value, in 24 hours, according to data from Coinmarket cap. Its total market capitalization was $ 8.2 billion, making it the ninth largest cryptocurrency.
On Thursday, a poster stated that Doge is the “cryptogram”. GME is the stock ticker for GameStop.
Another post suggested bringing doge to $ 1 a coin. The cryptocurrency was never at $ 1. In 2013, when it started, it was trading around $ 0.000232.
As the price of dogecoin has skyrocketed, there have been huge price drops in the past few hours. Reddit users on the board are encouraging people not to sell and to “keep pushing.”
Elon Musk, the founder of Tesla who has tweeted about stocks before and sent them on the rise, has tweeted about dogecoin in the past and indicated in April 2019 that it was his “favorite cryptocurrency”.
On Thursday, he tweeted a photo of a magazine cover for “Dogue” – a joke with the popular fashion title “Vogue”. Many Twitter and Reddit users understood that Musk was supporting the doge rally.
A Reddit user wrote, “Mr. Musk is with us .. for the moon.”
The situation with dogecoin looks different for GameStop, however.
The Reddit group WallStreetBets appears to be promoting the GameStop stock purchase narrative to create pain for hedge funds that are operating short or betting against the shares. When buying GameStop shares, a so-called short squeeze is created, forcing funds to cover their losses. This pushes the stock up.
Short sellers borrow shares to sell them in order to repurchase them at a lower price in the future, so that they can pocket the profit.
But there is no such thing as short selling dynamics in hedge funds in play with dogecoin. Instead, it looks like a group of people is just trying to increase cryptocurrency to make money. One of the first posts on SatoshiStreetBets said, “Let’s make DOGECOIN one thing. That’s it, this is the post.”
This activity is not new in the cryptocurrency space and has been around for several years.
In 2018, the U.S. Commodity Futures Trading Commission (CFTC) sounded the alarm over “pump and dump” schemes. It is when a particular cryptocurrency is released online and then more and more people buy. Those who were at the beginning sell when the price goes up, but many will buy near the top and lose money.