Dogecoin value reaches record high
Apr 22, 2021
Dogecoin, the cryptocurrency that began as a meme with the Shiba Inu dog as its logo, just surpassed 10 cents in value for the first time in its history. The cryptocurrency saw its value surge 200% in early trading last Friday, according to Fortune. This week, Dogecoin is up more than 570%. Why is the cryptocurrency worth so much right now?
The cryptocurrency, which started around seven years ago as a joke, has now reached a $52.2 billion market cap, more than Ford Motor or Marriott International, The Wall Street Journal reports. Until December 2020, it had a maximum value of half a cent.
Dogecoin stands out from other popular cryptocurrencies because it is relatively cheap, with an all-time high of around 40 cents. In late January, the value skyrocketed 800% in one day due to members of a Reddit board called SatoshiStreetBets, reports Forbes. Similar to the efforts of WallStreetBets, which contributed to GameStop’s surging shares in early 2021, the Reddit group aims to fortify the prices of cryptocurrencies.
According to Fortune, though the supply of Bitcoin is capped at 21 million, there are over 129.2 billion Dogecoin in circulation. It faces no limit on the number of coins that exist. This makes the cryptocurrency extremely accessible to those who want to invest. Though it is cheap like other cryptos, Dogecoin is liable to change rapidly and unpredictably. For example, Dogecoin’s value, which climbed nearly 800% back in January, dropped from its peak by nearly one-third in a matter of days. Its volatility as well as credibility could make Dogecoin a risky investment.
Dogecoin has also been widely supported by Elon Musk, who posts countless images and memes on Twitter about the crypto. Earlier this week, Musk posted a meme labeled “Doge Barking at the Moon,” which, according to Fortune, is a rallying cry for the r/WallStreetBets crowds for the GameStop stock. Musk also claimed Dogecoin as “the people’s crypto” and advocates for Bitcoin.
Fortune reports that even the software engineer who created Dogecoin, Billy Markus, is baffled by the rapid rise of his crypto. Markus explained on Twitter that Dogecoin started as a parody, adding to the irony of its current value.
While new traders pile into Dogecoin at such an extreme degree, investors on Robinhood reported having trouble with trades. The Wall Street Journal reported that the surge in interest for Dogecoin last week put immense pressure on crypto trading systems, which resulted in bringing down its order system. It also was criticized earlier in the year when it paused and limited customers’ purchases once GameStop stocks skyrocketed in popularity.