Dogecoin continues to explode and climbs 10,000% in 4 months – Geeko
If you had bought 100 euros of dogecoin on January 1, 2021, you could walk away today with around 10,000 euros. While it was worth 0.004 cents at the start of the year, it rose to 0.4 dollars on Friday. This meteoric rise was enough to lift it to 5th place in the cryptocurrency ranking with a capitalization of nearly $ 50 billion. In front of USDT, Cardano and Polkadot.
This observation testifies to the euphoria and the popularization of the cryptocurrency market. Some hope to make a fortune there, and quickly. But this bet is not without its dangers, as the majority of dogecoins are only owned and manipulated by a handful of individuals. They could sell at any time. And the fall is likely to be dizzying.
A joke that has become very serious
Dogecoin is reputed to be a “shitcoin”, that is, a currency which has no other use than its own existence and is often doomed to pure and unpredictable speculation. Created in 2013 with the image of the meme “Doge”, it was popularized by the Reddit forum to parody Bitcoin. The currency has no active developers and its own creator sold all of its assets in 2016.
Dogecoin has long been known to the cryptocurrency community, but was never really taken seriously until recently. In its 8 years of existence, it had risen to 1 cent only once in 2017. But its meteoric rise coincides with the Gamestop affair at the end of January 2021. As a reminder, a movement of investment in the The action of the American reseller of video games Gamestop had been launched by the impetus of the forum / r / wallstreetbet, in order to thwart the plans of several investment funds which bet on the fall of the stock.
This case sparked real euphoria on social networks. In the process, some people who had missed the boat quickly fell back on other assets to hope to make a profit. Emblematic figure of Reddit, dogecoin was the next logical step. On January 28, the volume of tweets talking about Dogecoin increased by 1800%.
A manipulated course
The digital euphoria was heavily fueled by Elon Musk. The latter had strongly defended and encouraged users of r / wallstreetbets during the controversy with tweets and memes. The billionaire then fell back on dogecoin and, since then, has risen as a local ambassador on Twitter. The value of the asset also rises regularly according to his tweets referring to cryptocurrency and the expression “to the moon” (note: nod to the oblique growth of the price of an asset). The latter had qualified in February these messages of “simple jokes”.
With such a meteoric escalation, it can be tempting to catch the train on the way and hope to grab some profit. But this practice is not recommended, because its success is the result of chance and the decision of a handful of people.
Indeed, 12 anonymous “whales” (investors with a very high percentage of the capitalization of an asset) currently own 74% of the entire market capitalization of dogecoin including 28% for just one person. It would suffice for one or more large investors to withdraw to bring down the price of the doge considerably, and at the same time lose a lot of money to small, ill-informed investors who arrived late. Moreover, today’s explosion coincides with a movement of $ 12 billion of dogecoins on the blockchain in a single day. By holding ¾ of the capitalization, it is almost only the “whales” that move the market.
