Dogecoin, a parody coin named after the ‘doge’ internet meme now has a market of $10 billion. What was made to make fun of cryptocurrency in 2013, it has now grown over 400 percent over the past month reaching an all-time high value of $0.057. Its current market cap according to CoinMarketCap is $7.4 billion.
Dogecoin’s mascot is the Japanese Shiba Inu dog which became popular through an internet meme (hence the name ‘doge’). The creators of Dogecoin called it a virtual currency that allows users to easily send money online.
The currency’s sudden rise (over $100 million in trading volume seen in just 24 hours) comes as a shock to many including the person who created Dogecoin. Jackson Palmer, the person who founded Dogecoin is worried that this rise is a sign of market excess.
“The fact that most conversations happening in the media and between peers focus on the investment potential is worrying, as it draws attention away from the underlying technology and goals this movement was based [on],” said Jackson, who left the team in 2015.
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He also went on to comment how this increase shows the current state of the cryptocurrency market when a currency that was made as a joke and hasn’t even received any sort of software update in the past 2 years has suddenly surged 400%.
Many people were surprised including the Dogecoin developers, but they seemed to show more optimism than Jackson. The developers claim that Dogecoin is proof that you don’t need a highly complex technology or top developers to make a cryptocurrency successful, as Dogecoin has none of that.
Another developer, Mark Keller said: “It’s a little scary when you work on software that powers a billion-dollar network. This is quite the responsibility. And, one of the main reasons why we are so reluctant to just slap any ‘innovative’ tech into the reference client. Still, I am proud of what we achieved and thankful to be part of such a great community.”
Dogecoin’s growth has also been massively influenced by the founder of Tesla and SpaceX, Elon Musk. Every time he tweets about the cryptocurrency, the value shoots up and while it can be good if you’re looking for a short-term investment, but anything long-term like Bitcoin is out of the question.
Dogecoin never really had much development as the team comprised of all volunteers which contributed to the currency in their spare time. Dogecoin is what people call an altcoin. The past month has seen an altcoin surge. Many altcoins have greatly benefitted from this surge like Ethereum and Ripple.
Although Ethereum is an altcoin, it didn’t surge as much as the other cheaper options out there. One of the reasons for this is because of the psychological effect of holding more coins or a full coin instead of holding a fraction of a coin says Dave Chapman, managing director at Hong Kong-based commodities and digital assets trading house Octagon Strategy.
This is true since the two most popular digital currencies i.e. Bitcoin and Ethereum are too expensive for many investors especially Bitcoin. Thus, many new investors who come into the crypto market because of the ongoing trend don’t have enough money to purchase a full Bitcoin. Holding a few Ripple coins feels better than holding a fraction of a Bitcoin. Take Dogecoin for example, for the price of one Bitcoin, you can buy over a million Dogecoins!
A buyer would thus feel better owning more digital coins than less which is why they’d prefer buying cheaper cryptocurrencies. Apart from that, many investors feel that these cheap currencies might surge like Bitcoin one day this is also why altcoin demand is increasing due to speculative reasons.
Although Dogecoin’s sudden increase is concerning to people like Jackson Palmer, its developers seem to be enthusiastic about the whole situation. You can purchase Dogecoins from online exchanges or even mine them. However, don’t expect the Dogecoin boom to last long unless the developers start bringing out major updates as the coin was never made with seriousness in the first place.