(Bloomberg) — Dogecoin is soaring today, reaching new all-time highs both in dollar terms and also relative to Bitcoin.
Its rise is very similar to GameStop, both on a superficial level and on a deeper, structural level.
On a superficial level, you know, Dogecoin is the original memecoin. And GameStop was the original memestock. And both are fun to talk about and laugh about. And people find buying them both to be fun. Everyone likes to be in on the joke and that makes the price go up. Pretty obvious.
On a deeper level, however, is that much like with GameStop, you can think of there being a large short position in Dogecoin. It’s not necessarily the case that there’s a lot of traders literally betting that Dogecoin goes down. But in the sense that Doge’s rise is costly for the crypto industry, many people in the space are de facto short it. After all, Dogecoin blows apart the traditional crypto narratives, so it makes the whole thing look like a joke.
And then beyond that, the most prominent crypto exchange doesn’t even offer Dogecoin trading. If you look at app store rankings right now, per SensorTower, you see that Coinbase (which doesn’t list Doge) ranks 20th in the free apps in the Apple App Store. On the other hand, Robinhood (which does list the coin) currently ranks 7th. There’s no doubt that demand to buy Dogecoin is driving demand to get on Robinhood right now. And it’s interesting that in a moment of crypto euphoria, shares of Coinbase are down nearly 5%. In fact, its shares are trading at a new all-time low today, well off its all-time highs.
What’s more, if you recall back in early February when GameStop was pumping like crazy, it corresponded with significant weakness for the broader market. We’re seeing that in the cryptosphere today, with most of the major coins — especially Bitcoin — declining amid the rally.
So Dogecoin is GameStop: A meme, plus an asset that many in the space are de facto short.