A Doge’s breakfast?
The popular cryptocurrency dogecoin, designed as a joke in 2013, plummeted last week after hitting a record high on Monday, leaving few investors laughing.
Dogecoin, on the last check, was trading at 0.06784 cents, down 20% from its February 7 high of 0.087159, according to CoinDesk data. This drop meets the criteria commonly used among Wall Street chart watchers and technical analysts for a bear market.
Reading: Dogecoin? Many ‘retail gamblers will lose money’, says the crypto expert
It is unclear where cryptography is going from here, it has still increased by about 50% in the last seven days and has enjoyed an astonishing gain of 1,350% since the beginning of 2021, with a market value of $ 8.7 billion as of Friday afternoon. This ranks dogecoin out of the top 10 cryptos, with bitcoin BTCUSD,
at the top of the ranking with a market value in excess of $ 880 billion.
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“People are moving the markets en masse and playing even more with each other without understanding the ramifications or their own psychological limitations.”
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Doge’s recovery began after a series of optimists, although at times enigmatic tweets from Tesla Inc. TSLA,
Chief Executive, Elon Musk.
Several celebrities, including Calvin Broadus, aka Snoop Dogg, and Gene Simmons from rock band Kiss have joined Musk – as well as billionaire investor Mark Cuban – have been tweeting about investing in dogecoin.
On Reddit’s popular SatoshiStreetBets chat forum, some expressed hope of raising the value of dogecoins to $ 1.
However, cryptography experts have warned that dogecoin, pronounced “dōj-coin” and commonly associated with a popular meme with a shiba inu dog, has limited utility compared to other decentralized cryptographic assets, including bitcoin.
Dogecoin co-founder Billy Markus told The Wall Street Journal in an article in early February that he created the asset in 2012 as a “cheerful cryptocurrency”, then known as Bells, to serve as the fun version of bitcoin.
In an open letter on Reddit this week, Markus also wrote about the cryptocurrency.
“It went from being a silly joke to something that is worth something to people very quickly, and a community was developing rapidly, with many suspicious people and new people, quickly creating services and infrastructure around them,” wrote the co-founder.
Nic Carter, a crypto and blockchain venture capitalist who founded Castle Island Ventures at CNBC earlier this week, warned that average investors could be seriously hurt by placing speculative bets on an asset with no real purpose. He also found it strange that Musk supported the virtual asset.
“It is somewhat disconcerting to see Elon Musk so enthusiastic about this,” said the co-founder of Castle Island.
Bullish bitcoin investors argue that the price gains of bitcoin, the world’s number one cryptocurrency, are supported by the limited supply of cryptography inherent in its code. Only 21 million bitcoin will exist, and so-called bitcoin mining, or solving complex computational problems that are rewarded by bitcoin, becomes more difficult over time. The final bitcoin cache is unlikely to be mined until around 2140.
The offer of dogecoin, on the other hand, has no built-in limit, with the number of dogecoin that can be extracted at any time ranging from one to hundreds of thousands.
However, interest in dogecoins underscores the appetite for alternative assets in an environment where interest rates of 0% prevail as governments around the world try to mitigate the economic damage of the COVID-19 pandemic.
Charles Hayter, CEO of London-based research site CryptoCompare, told MarketWatch earlier this week that investors need to be careful about investments like dogecoin.
“People are moving the markets en masse and playing even more with each other, without understanding the ramifications or their own psychological limitations.