Every dog has its day…but a whole year?
Indeed, dogecoin, the meme cryptocurrency linked to an image of a Shiba Inu dog, has been enjoying one of the best years for cryptocurrency in recent memory, boasting year-to-date gains of more than 11,000% and putting it in the top 10 of the most highly valued digital assets this year.
At last check, dogecoin
was changing hands at 54 cents, up more than 23% in the past 24 hours and up around 11,210% so far in 2021, according to CoinDesk.
That parabolic rise is drawing both applause and apprehension as its supporters aim to drive the parody coin to a value near $1, with critics warning that the asset bears all the hallmarks of an asset bubble that is bound to pop and leave carnage in its wake.
Only, don’t tell that to those cheerleading the crypto, or risk being met with this common refrain: “enjoy being poor.”
So why is dogecoin, pronounced “dōj-coin,” on such a monumental tear that has outstripped crypto considered more serious representatives of the age of digital assets and blockchain? Here are a few reasons:
Its biggest booster set to guest host ‘SNL’
Elon Musk, CEO of Tesla Inc. and SpaceX, will host “Saturday Night Live” this weekend, which has already drawn cheers and jeers for the technologist. He has become one of the most prominent and vocal champions of dogecoin this year and some speculate that he could do something to promote doge.
Musk did refer to himself as the “dogefather” in one recent tweet ahead of his “Saturday Night Live” gig.
Brokerages trade dogecoin
A number of new venues have announced that they will trade dogecoin on their exchanges in recent days and weeks.
Crypto exchange Gemini on Tuesday announced trading and custody support for the coin. Trading platform eToro also made dogecoin available for trading on its platform. Webull allowed its users to purchase dogecoin back on April 20.
Fear of missing out also is said to be behind the surge. Some crypto participants speculate that the rise in dogecoin is being supported by retail traders who see the parody coin as more accessible investment (or trade) than, say, bitcoin
which was changing hands at $54,000, at last check on CoinDesk.
“Dogecoin is surging because many cryptocurrency traders do not want to miss out on any buzz that stems from Elon Musk’s hosting of ‘Saturday Night Live,’” wrote Edward Moya, senior market analyst at Oanda, in a daily note.
Gains in traditional assets also might seem more pedestrian. By comparison, gold futures
are down 6% so far this year, the Dow Jones Industrial Average
and the S&P 500 index
are up by at least 10% in 2021, while the Nasdaq Composite Index
has gained over 5%.
Konstantin Boyko-Romanovsky, CEO of Allnodes, via an emailed message, said he viewed support from Musk and fellow billionaire Mark Cuban as central to the bull thesis for dogecoin, but also said that some may perceive the crypto as more accessible compared against bitcoin, which hit a recent peak above $60,000 before cooling.
“It appeals more to the general public because it costs so little. $60,000 for a single bitcoin may be intimidating to some. In a way, doge then is more like a USD but in a digital form,” he wrote.
Bubbles & manias
Moya wrote that the dogecoin bubble should have “popped by now, but institutional interest is trying to take advantage of this momentum and that could support another push higher.”
Many skeptics warn that dogecoin could leave a lot of newbie investors hemorrhaging losses if they wade into the asset imprudently.