An accumulation of interest in the new crypto favorite Dogecoin has taken the cryptocurrency by storm with its 8,000% rally so far this year.
The meme-based token rose more than 200% last week, fueled by Elon Musk’s “Doge Barking at the Moon” tweet. A day before the billionaire’s tweet, only several hundred Twitter users engaged with the hashtag “$Doge.” But engagement soared over 16,000% just a day later, with over 55,000 Twitter users joining in, according to data from online social analysis platform Cyabra.
In the Dogecoin community’s latest attempt to beat the coin’s all-time-high, investors are now eyeing a target of $0.42 to make its 4/20 mark on April 20, or “Doge Day.”
After Dogecoin peaked at a record $0.41 this week, online trading platform Robinhood began to experience major crypto trading outages due to unprecedented demand. That meant many investors were unable to join in on Dogecoin’s rally when it was at its peak. This is similar to the GameStop situation in January when traders were unable to get in on the booming stock because activity in the shares was restricted following high demand.
Here’s why the currency that was started as a joke is now seeing surging popularity, according to nine experts.
Disruption to the financial elite
“Dogecoin is a lighthearted and authentic community built upon a serious cryptocurrency infrastructure. It fills a niche that BTC and ETH do not. Its lightheartedness also makes it perfect for sending a message to the current financial establishment, which is anything but lighthearted. The more that the financial establishment is dismayed, the better.” – Investing and risk expert, Dr. Richard Smith
“The overarching narrative behind the coin’s 30x run this year is a protest against systemic inequities in the traditional financial industry – Dogecoin is, after all, the original “meme asset.” This is an extension of the value that cryptocurrencies derive from vibrant and growing communities that give rise to network effects.” – Thomas Perfumo, head of business operations and strategy at Kraken Digital Asset Exchange
“Many people view Doge as the ‘people’s cryptocurrency’ because it was created as a joke. Major players and corporations are unlikely to buy in and manipulate the market or understand that it could be a viable currency. Elon has echoed this sentiment. These factors have created a perfect storm for Doge, pumping the price to where it is today.” – Ben Weiss, CEO at bitcoin ATM operator CoinFlip
Joining the crypto frenzy
“While the Coinbase listing brought attention to crypto as a whole, for DOGE, it was a combination of Elon Musk’s tweets, as well as WallStreetBet’s recent interest in crypto that really kicked off this rally.” – Jason Lau, COO at San Francisco-based exchange OKCoin
Dogecoin is gaining traction because it is “still relatively cheap and people who may feel like they missed out on the upside of Bitcoin are thinking that perhaps this is their shot.”
“The sentiment seems to be: Bitcoin is for the wealthy, Ethereum for the middle class, and Dogecoin is for the people.” – Eric Berman, senior legal editor of US Finance at Thomson Reuters Practical Law
Emotional reactions to mainstream adoption
“I am quite confident that there is no real background to the current phase of Dogecoin’s growth. The rate is currently related to the general mood of investors on the crypto market and is a kind of indicator of the emotional state of market participants, reflecting their expectations.” – Maria Stankevich, chief business development officer at crypto exchange EXMO UK
“It’s a testament to how far narratives, memetic themes, and flows drive markets rather than fundamentals. In the old paradigm fundamental value would provide a magnet for prices to gravitate towards. In the new paradigm, it is all about flows – the order book, the buyers and the sellers.” – Roshun Patel, vice president at digital currency prime broker Genesis
Investors looking for a ‘fun bet’
“The latest uptick in Dogecoin’s price isn’t indicative of any meaningful value the cryptocurrency offers, it’s just a surge in interest from people looking to get rich quick. That can make for a fun bet, but it’s not good investing. And if you’re the one left holding on to the coins when the market tanks, you may regret taking a punt in the first place.” – David Kimberley, analyst at UK investing app Freetrade
“It’s moved by headlines, tweets, celebrity, or corporate endorsements and while that’s likely belittled by ‘traditional’ investors, it’s what brings the masses to cryptocurrencies. The masses understand headlines, tweets, and endorsements and the masses will likely mature as crypto enthusiasts and begin to appreciate the movement for its more technical nuances.” – Michael Kamerman, CEO of Scandinavian-owned brokerage Skilling